Federal Reserve Chairman Ben Bernanke said the U.S. economy is slowly digging out of the financial crisis of the past few years and the central bank now expects GDP growth of about 3.1% to 3.3% this year. Speaking at the first press conference by a Fed chairman following a meeting of the Federal Open Market Committee, Bernanke reiterated much of what the committee announced earlier Wednesday in its monetary policy decision. He said the central bank expects GDP growth for 2012 and 2013 in the range of 3.5% to 4%. In January, the Fed projected growth of 3.4% to 3.9% for this year and 3.5% to 4.6% the next two years. Bernanke held the confab with journalists as the Federal Reserve looks to increase transparency. He said up until 1994 or so the Fed didn’t even tell the public when the FOMC voted to change the federal funds rate. Bernanke said some within the Fed previously didn’t feel it necessary to speak publicly about its policy decisions. “But at this point, we think meeting with the press and getting information to the public in this way outweighed some of these risks,” he said. The central bank expects U.S. unemployment rate to remain elevated and finish 2011 between 8.4% and 8.8% — down from a prior view of about 9%. The rate has hovered near 9% this year after nearly reaching 10% last fall. The Fed now expects unemployment to drop to below 8% next year and further decline to around 7% in 2013. But Bernanke said progress toward a more normal trend of unemployment somewhere around 5% “seems likely to be slow.” “We are digging out of a very large hole,” he said. There are still about 7.5 million less jobs now than before the crisis began, Bernanke said, but the Fed hopes to see stronger jobs growth soon. Write to Jason Philyaw.
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