Federal Reserve Chairman Ben Bernanke said Tuesday that the Great Recession has "very likely" ended -- and as the most famous student of the Great Depression, one would presume that he should know.
Unfortunately, Bernanke also raised the specter of the so-called jobless recovery, warning that growth may be too tepid to cut the unemployment rate significantly anytime soon.
"Even though from a technical perspective the recession is very likely over at this point, it's still going to feel like a very weak economy for some time," Bernanke said in a speech at the Brookings Institution in Washington, D.C., Bloomberg reported.
Unemployment, now at 9.7 percent, will be slow to abate if growth is only "moderate," Bernanke said. Given that the Fed's growth forecast is actually higher than economists' average outlook, the scenario for the nation's jobless is perhaps now even more daunting.
In addition to high unemployment, tight credit conditions will make the economy seem weak, even though the downturn has most likely ended, Bernanke said.
Still, the speech marks Bernanke's most explicit comment that the longest recession in 70 years is probably over. It also echoes remarks made by President of the Federal Reserve Bank of San Francisco Janet Yellen on Monday. "We face an economy with substantial slack, prospects for only moderate growth, and low and declining inflation," Yellen said.
Bernanke's comments came after the Commerce Department said August retail sales grew 2.7 percent -- the best reading in three-and-a-half-years, and ahead of economists' average forecast. True, a large chunk of that came from the "cash for clunkers" program -- car and parts sales rose nearly 11 percent -- but even after adjusting for that one-time event, there's no doubt consumers opened their wallets and purses last month.
Bernanke says the recession is likely over -- but it won't feel like it