Bernanke Predicts Moderate Economic Growth
Bernanke Predicts Moderate Economic Growth

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The head of the U.S. central bank is predicting moderate growth in the U.S. economy, with subdued inflation.

In a New York speech Monday, U.S. Federal Reserve Chairman Ben Bernanke cautioned that significant economic challenges remain, including tight credit and unemployment that he described as "much too high."

Bernanke gave no indication that the Fed would raise U.S. interest rates from historic lows any time soon.  The low rates are intended to bolster the economy by making it easier for companies to borrow the money they need to buy equipment, build factories, and hire people. 

But low interest rates also tend to cut the value of the dollar.  The Fed chairman tried to reassure investors that he will be "attentive" to the strength of the dollar.

Earlier, a report from the Commerce Department showed retail sales rose (1.4 percent) in October, based largely on strong auto sales.  Outside the volatile transportation sector, overall sales increased just two-tenths of a percent.

Sales of all kinds decreased in September.

Economists track retail sales closely to get information about the consumer demand that drives about two-thirds of the U.S. economy.

A separate report on manufacturing in the New York area showed the sector growing in November, but at a slower pace than the previous month.   Experts watch New York data for hints about the health of the factory sector nationwide.

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