BusinessInsider writes: In his speech assessing the state of the economy, Bernanke has two great paragraphs.
First, he recognizes that the household sector is unusually weak, and that this is the essence of the Great Recession: "One striking aspect of the recovery is the unusual weakness in household spending. After contracting very sharply during the recession, consumer spending expanded moderately through 2010, only to decelerate in the first half of 2011. The temporary factors I mentioned earlier--the rise in commodity prices, which has hurt households' purchasing power, and the disruption in manufacturing following the Japanese disaster, which reduced auto availability and hence sales--are partial explanations for this deceleration. But households are struggling with other important headwinds as well, including the persistently high level of unemployment, slow gains in wages for those who remain employed, falling house prices, and debt burdens that remain high for many,,,"
Read more: http://www.businessinsider.com/bernanke-nails-two-important-points-2011-9#ixzz1XO2fBG00
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