Chairman of the Federal Reserve Board Ben Bernanke on Tuesday raised hopes that the economy would recover fully before the end of the year, in testimony before a congressional committee in Washington.
Bernanke said the recovery would be gradual and dependent upon full recovery in the housing and financial sector.
We continue to expect economic activity to bottom out, then to turn up later this year, Bernanke said. Key elements of this forecast are our assessments that the housing market is beginning to stabilize and that the sharp inventory liquidation that has been in progress will slow over the next few quarters.
Other economic data out yesterday brought good news to the construction equipment and homebuilding industries, as spending for construction of new homes and pending home sales rose more than expected in the last month.
A report Tuesday from the Institute for Supply Management showed U.S. service industries, which make up 90 percent of the economy, contracted at the slowest pace in six months in April, what economists hope is another positive indicator the recession is ending.