The U.S. economic recovery that started 18 months ago was still underway, but not strongly enough to significantly cut unemployment, Federal Reserve Chairman Ben Bernanke said in Senate testimony Friday.


U.S. Federal Reserve Board Chairman Ben Bernanke testifies in front of the U.S. Senate Budget Committee on "The U.S. Economic Outlook: Challenges for Monetary and Fiscal Policy" on Capitol Hill in Washington, January 7, 2011.(Xinhua/Reuters Photo)
"Growth slowed somewhat this past spring as the impetus from fiscal policy and inventory building waned and as European sovereign debt problems led to increased volatility in financial markets," said the U.S. central bank chief in testimony to the Committee on the Budget.


Labor Department figures revealed Friday the unemployment rate dropped by 0.4 percentage point in December 2010 from November 2010, but still stood at 9.4 percent.


Although recent indicators of spending and production in the nation had generally been encouraging, conditions in the labor market had improved only modestly at best, Bernanke said.


After the loss of nearly 8.5 million jobs in 2008 and 2009, private payrolls expanded at an average of only about 100,000 per month in 2010, a pace barely enough to accommodate the normal increase in the labor force and insufficient to materially reduce the unemployment rate, he said.


The Fed predicted in November 2010 that the nation's unemployment rate would hover around 8.9 percent to 9.1 percent in 2011.


VietNamNet/Xinhuanet