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Saturday 17th of April 2010
April 14, 2010    

US retail sales up but Fed issues caution

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by Kay Murchie

Data has today revealed a 1.6% surge in US retail sales for March, suggesting that consumers are willing to spend again.

In addition, official data revealed that inflation remains subdued with US consumer prices creeping up just 0.1% in March compared with February. On an annual basis, prices were up 2.3% in March compared with a year ago.

According to Federal Reserve Chairman Ben Bernanke, inflation is under control.

In congressional testimony that concentrated primarily on future growth, Bernanke said inflation is not a main concern but a moderate US economic recovery is likely to warrant very low interest rates for an extended period.

However, Bernanke’s outlook for growth was rather gloomy, suggesting growth is being hampered by weakness in the construction sector.

He added the US still faces “difficult choices” in cutting the country’s deficit.

“Addressing the country’s fiscal problems will require difficult choices, but postponing them will only make them more difficult,” Mr Bernanke said.

“Significant restraints on the pace of the recovery remain, including weakness in both residential and non-residential construction and the poor fiscal condition of many states and local governments,” he added.

However, on a positive note, he highlighted a slowing in job cuts and welcomed the continued growth in consumer spending.

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