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Federal Reserve Chairman Ben Bernanke testifies on Capitol Hill in Washington, 25 Mar 2010, before the House Financial Services Committee hearing on unwinding emergency federal reserve liquidity programs and implications for economic recovery
The head of the U.S. central bank says the economy still needs to be supported by low interest rates and other efforts to encourage lending.
But, Federal Reserve Chairman Ben Bernanke says as the economic recovery grows stronger, the bank is gradually and carefully withdrawing stimulus efforts. He did not say when interest rates will be raised.
Bernanke told members of congress Thursday, that the period of "intense panic" at the beginning of the financial crisis prompted banks to drastically cut lending, which slowed the economy.
The Fed has tried to encourage lending by cutting interest rates to near-zero. The central bank has also made more money available for loans with a series of complex programs that are gradually being phased out.
The financial crisis sharply led to massive layoffs in the United States, but the slow and uneven economic recovery is now cutting the number of jobs being lost.
The Labor Department reported Thursday that 14,000 fewer laid-off workers put in claims for assistance compared to the week before. A total of 442,000 people filed for unemployment last week. The U.S. unemployment rate stands at 9.7 percent.
Economists interviewed by news organizations say the jobless numbers are getting low enough to indicate the battered U.S. job market is stabilizing after the recession pushed unemployment up to its highest level in decades.
On Friday, officials will publish the final estimate of U.S. economic growth in the last three months of 2009. Economists predict the figures will show a strong 5.9 percent growth rate.
Later Friday, a key measure of consumer confidence is expected to show a very slight gain.
Some information for this report was provided by AP, AFP and Reuters.
