High unemployment and a sclerotic housing market are holding back the US recovery, US Federal Reserve Chairman Ben Bernanke said on Friday.
Lamenting the social costs of high joblessness and a depressed housing market, Bernanke said community groups, local leaders and businesses could all help stop the bleeding.
“Our economy is far from where we would like it to be, and many people and neighborhoods are in danger of being left behind,” he told an audience in Arlington, Virginia. “In some areas, for example, high foreclosure rates have produced significant numbers of vacant properties, depressing surrounding home prices, attracting crime and creating financial burdens for local governments.”
Bernanke is calling for more lending to people and small businesses in lower-income neighborhoods. His comments come a day after official data showed the economy grew more slowly than expected in the first quarter of the year.
The 1.8 percent growth rate in GDP in the first quarter was weaker than the 3.1 percent growth in the previous quarter, the US Department of Commerce reported on Thursday.
“Unemployment remains quite high, particularly among minorities, the young and those with less education,” Bernanke said, according to prepared remarks.
Meanwhile, Americans made more money and spent more money in March, the commerce department reported on Friday. However, after adjusting for inflation, spending rose only 0.2 percent and after-tax incomes were essentially flat.
Consumer spending, which accounts for roughly 70 percent of economic activity, grew at an annual rate of 2.7 percent in the period between January and March. That was a sharp decline from the 4 percent growth in the previous quarter.