Bernanke not optimistic about labor market (by Greg Robb)

WASHINGTON (MarketWatch) - A close reading of recent economic data doesn't show any hint of improvement ahead for the weak U.S. labor market, Federal Reserve Board Chairman Ben Bernanke said Tuesday. "Recent indictors, including new claims for unemployment insurance and surveys of hiring plans, point to the likelihood of more sluggish job growth in the period ahead," Bernanke said in testimony prepared for the Joint Economic Committee of Congress. Overall, the economy should pick up from the tepid 0.9% average growth rate of the first six months of the year, Bernanke said. In his testimony, Bernanke said the Fed's latest Operation Twist should put downward pressure on longer-term interest rates and "help make broader financial conditions more supportive of economic growth." Inflation has begun to moderate as the central bank expected, he said. The Fed is prepared to take further action "as appropriate" to promote a stronger recovery but central bank policy is not a panacea for the problems currently faced by the U.S. economy, he said.