"After contracting sharply over the past year, economic activity appears to be levelling out, both in the U.S. and abroad, and the prospects for a return to growth in the near term appear good."

A top Obama Administration official today said the U.S. economy is on the verge of recovery, even though it is likely to be relatively slow at first.

In a speech at the Kansas City’s Annual Economic Symposium, the Chairman of the Federal Reserve Board, Ben Bernanke, said fears of financial collapse have receded substantially.

“After contracting sharply over the past year, economic activity appears to be levelling out, both in the U.S. and abroad, and the prospects for a return to growth in the near term appear good,” Mr. Bernanke said.

Notwithstanding this noteworthy progress, Mr. Bernanke, however, said critical challenges remain: strains persist in many financial markets across the globe, financial institutions face significant additional losses, and many businesses and households continue to experience considerable difficulty gaining access to credit.

“Because of these and other factors, the economic recovery is likely to be relatively slow at first, with unemployment declining only gradually from high levels,” he said.

Mr. Bernanke said the world is now “beginning to emerge” from the deep global recession. “As severe as the economic impact has been, however, the outcome could have been decidedly worse,” he said.

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