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US Federal Reserve Chief: Global Economy on the Mend

The head of the U.S. central banking system says the prospects are good for a return to global economic growth in the near future.

Ben Bernanke told the world's top central bankers Friday that economic activity appears to be leveling out after contracting sharply over the past year.

But the U.S. Federal Reserve chairman warned that difficult challenges remain.

The bankers are at an annual meeting in the mountain town of Jackson Hole, in the western U.S. state of Wyoming, where they are reflecting on the global economic recession.

Germany, France and Japan have pulled out of recession, and the U.S. economy is showing signs of stabilization.

On Friday, the National Association of Realtors said U.S. home sales rose 7.2 percent in July. That is its largest monthly increase in 10 years.

A slowdown in the housing market and problems with home owners repaying their loans helped spark the U.S. economic crisis and the global slowdown that followed.

The Federal Reserve injected trillions of dollars into the U.S. economy to try to stop it from shrinking and to jump-start growth.

In Europe Friday, a closely watched survey showed the 16 countries using the euro currency are close to growing again.

The financial information company Markit said its measure of business activity - the composite purchasing managers' index - for the eurozone rose in August.

The index climbed three points to 50, a number that marks the point between economic expansion and contraction.

Some information for this report was provided by AFP, AP and Reuters.