Page last updated at 18:58 GMT, Wednesday, 7 April 2010 19:58 UK

Bernanke highlights US housing and job market weakness

US Federal Reserve chairman Ben Bernanke
Mr Bernanke said hiring remains weak

Federal Reserve chairman Ben Bernanke has given a sombre assessment of the US recovery, stressing problems with the housing market and unemployment.

While acknowledging the worst of the crisis is over, Mr Bernanke said: "We are not out of the woods yet."

"Many Americans are still grappling with unemployment or foreclosure, or both," he said, adding that bank lending remains "very weak".

Mr Bernanke's comments came in a speech delivered in Dallas, Texas.

Weak job market

The Fed chairman highlighted the fragile nature of the property market in the US.

"We have yet to see evidence of a sustained recovery in the housing market. Mortgage delinquencies for both sub-prime and prime loans continue to rise, as do foreclosures," he said.

The other biggest drag on the economic recovery is unemployment, Mr Bernanke added.

"Although layoffs have eased in recent months, hiring remains very weak".

However, the Fed boss did say that economic growth should ensure that the unemployment rate will fall.

"My best guess is that economic growth, supported by the Federal Reserve's stimulative monetary policy, will be sufficient to slowly reduce the unemployment rate over the coming year."

The US economy grew by an annualised 5.6% in the final three months of 2009.

However, analysts expect figures to show that growth in the first quarter of this year was more modest.

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