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Positive words on economy

Obama and Bernanke said the recovery was painfully slow, but things would improve.

"We've still got some enormous work to do" to make up for the more than eight million jobs lost during the 2007-09 recession.- President Obama
"We've still got some enormous work to do" to make up for the more than eight million jobs lost during the 2007-09 recession.- President ObamaRead moreJOSHUA ROBERTS / Bloomberg

President Obama and Federal Reserve Chairman Ben S. Bernanke on Tuesday each offered hope for the nation's economy even as they acknowledged its struggles.

While Bernanke called the recovery from the recession - especially for the job market - "frustratingly slow," he predicted that the economy would expand later this year.

He blamed the recent weakness on high gasoline prices and the effect of the March 11 earthquake in Japan, which has slowed production of cars and other products using parts made in Japan. Both factors should ease in coming months, Bernanke said at an international bankers conference in Atlanta.

Separately, Obama told reporters in Washington that he was concerned about the recent slowdown in the economy but did not think the country would slip back into an official downturn - a double-dip recession.

Still, he noted the stubbornly high unemployment rate, saying: "We've still got some enormous work to do" to create enough jobs to make up for the more than eight million lost during the 2007-09 recession.

The president spoke about the new economic trouble in detail for the first time since a report last week showed job growth had slowed sharply in May and unemployment rose to 9.1 percent.

"I am concerned about the fact that the recovery that we're on is not producing jobs as quickly as I want it to happen," Obama said. "We don't yet know whether this is a one-month episode or a longer trend."

Appearing at a White House news conference with German Chancellor Angela Merkel, the president said the European debt crisis had created a drag on the U.S. economy, along with gasoline prices.

In his speech, Bernanke made no mention of any new steps the Fed might take to boost the economy. The central bank's $600 billion Treasury bond-buying program is ending this month.

The program was intended to keep interest rates low to strengthen the economy. But critics said it raised the risk of high inflation. Supporters say the economy still needs some propping up.

The Fed chairman said the economy could still benefit from low interest rates.

Bernanke called the May jobs report disappointing. It showed the unemployment rate rose one-tenth of a percentage point and the economy added just 54,000 jobs, the fewest in eight months. But he said he expected job creation and overall economic growth would rebound in the coming months.

"Overall, the economic recovery appears to be continuing at a moderate pace, albeit at a rate that is both uneven across sectors and frustratingly slow from the perspective of millions of unemployed and underemployed workers," Bernanke said.

Bernanke said the central bank would not consider the recovery to be well-established "until we see a sustained period of stronger job creation."

He repeated a pledge that central bank officials have been making for more than two years: that they will keep interest rates at record lows "for an extended period." Its target rate for the key federal funds rate - the rate at which commercial banks can borrow from one another in short-term loans - is at zero to 0.25 percent.