Economy, Federal Reserve | featured news

Federal Reserve Chairman Ben Bernanke makes clear in a letter to a House lawmaker that he thinks the Fed can do more to bolster the economic recovery and help reduce unemployment.

Federal Reserve Chairman Ben Bernanke said on Monday that although broad measurements of the economy point to recovery, many people and businesses are facing tough times.

U.S. employers in July hired the most workers in five months, but an increase in the jobless rate to 8.3 percent could keep prospects of further monetary stimulus from the Federal Reserve on the table.

The Federal Reserve’s policy-making committee took no new steps to support the economy at a meeting that ended Wednesday, although the committee signaled in a statement that it was ready to take new action if job growth does not improve.

As the Federal Reserve meets Tuesday and Wednesday to consider new stimulus for the weak economy, one of the key data it will be looking at is consumer spending, which is clearly waning.

Federal Reserve Chairman Ben S. Bernanke gave no indication Tuesday that the central bank was about to launch new economic stimulus, even as the Fed chief painted a worrisome picture of an economy losing momentum on a wide scale.

Consumer prices were flat in June as the cost of gasoline dropped, offering some relief for cash-strapped Americans and scope for the Federal Reserve to ease monetary policy further to help the faltering recovery.

Federal Reserve officials sent new signals they are seriously considering more actions to bolster the economic recovery but disappointed many investors by not indicating they are committed to taking action.

Investors appeared unimpressed Wednesday with the Federal Reserve's latest step to help the economy, an extension of a program to lower long-term interest rates. Stocks were little changed for the day, and the yields on Treasury bonds were trading about where they were before the Fed's announcement.

The U.S. job market is flagging, and consumer prices are barely rising. The picture sketched by data released Thursday has made some economists predict the Federal Reserve will announce some new step next week to boost the economy.