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Bernanke reflects on term: 'Recovery clearly remains incomplete'

Federal Reserve Board Chairman Ben Bernanke testifies on the Board's Semiannual Monetary Policy Report to Congress during a Senate Banking, Housing and Urban Affairs Committee hearing on Capitol Hill on July 17, 2012 in Washington, D.C. UPI/Kevin Dietsch | <a href="/News_Photos/lp/6d6afe06943379630d133101e17f564d/" target="_blank">License Photo</a>
Federal Reserve Board Chairman Ben Bernanke testifies on the Board's Semiannual Monetary Policy Report to Congress during a Senate Banking, Housing and Urban Affairs Committee hearing on Capitol Hill on July 17, 2012 in Washington, D.C. UPI/Kevin Dietsch | License Photo

PHILADELPHIA, Jan. 3 (UPI) -- Ben Bernanke, speaking on eight years as U.S. Federal Reserve chief, said Friday recovery from the deepest recession since the Great Depression isn't complete.

"The recovery clearly remains incomplete," Bernanke told an audience at the American Economic Association's annual meeting in Philadelphia.

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Chief among the unfinished business concerning Bernanke is the jobless rate which "still is elevated" at 7 percent, he said.

Also, he said participation in the labor market still is declining, partly because workers remain discouraged about job prospects.

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As of December, 63 percent of Americans over the age of 16 participated in the job market, either by having a job or looking for one, CNN Money said. Before the recession, it was about 66 percent.

Bernanke also cautiously defended the success of his most controversial policy to try to pull the U.S. economy out of its malaise: quantitative easing. He kept the Fed's key interest rate near zero since December 2008, but when that wasn't enough, the Fed started a three-part bond-buying spree to try to lower longer-term interest rates as well.

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Quantitative easing more than quadrupled the size of the Fed's assets to above $4 trillion. Skeptics, though question whether the policy really helped the job market and whether pumping that much money into the economy eventually would lead to rapid inflation, CNN Money said.

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Addressing his critics Friday, Bernanke said research mostly supports his view that the program "helped promote the recovery."

In December, the Fed decided to wind down the program gradually.

Looking ahead, Bernanke said he thinks barriers to economic improvements are beginning to fall, CNN Money said.

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"The combination of financial healing, greater balance in the housing market, less fiscal restraint, and, of course, continued monetary policy accommodation bodes well for U.S. economic growth in coming quarters," he said.

"Of course, if the experience of the past few years teaches us anything, it is that we should be cautious in our forecasts," Bernanke warned.

Bernanke's term ends Jan. 31. The U.S. Senate is expected to confirm his successor, Janet Yellen, Monday.

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