Washington: Expressing concerns over the future of US economy, Federal Reserve Chairman Ben Bernanke has said if Congress doesn't reach agreement soon to avert a budget crisis, the US might slip into recession.
Bernanke said the economy is growing modestly but has weakened. Manufacturing has slowed. Consumers are spending less. And job growth has slumped to an average of 75,000 a month in the April-June quarter from 226,000 a month from January through March. The unemployment rate is stuck at 8.2 percent.
Bernanke noted that the economy, after growing at a 2.5 percent annual rate in the second half of 2011, slowed to roughly 2 percent from January through March. And it likely weakened further in the April-June period.
Congress needs to resolve its impasse well before the year ends, Bernanke said.
Without an agreement, tax increases and deep spending cuts would take effect at year's end. Bernanke noted what the Congressional Budget Office has warned: A recession would occur, and 1.25 million fewer jobs would be created in 2013.
With Agency Inputs