Improvements to the job market remain "frustratingly slow," Federal Reserve Chairman Ben Bernanke told Senators Tuesday, repeating the same language he used a year ago.
NEW YORK (CNNMoney) -- Europe's debt crisis and fiscal cliff in the United States are the two biggest risks threatening the recovery, Federal Reserve Chairman Ben Bernanke told senators Tuesday.
Despite sounding gloomy on the economy, the Fed chief gave few hints about further stimulus from the central bank. Stocks turned lower as he spoke.
Wall Street has been hoping for additional stimulus from the Federal Reserve, including the possibility of more asset purchases. That policy, known as quantitative easing, is meant to push interest rates even lower than their current historic lows.
Bernanke admitted that the Fed has been considering that option, but also sounded cautious about the risks.
"We've looked at a range of possible tools," Bernanke said. "We are looking for ways to address the weakness in the economy should more action be needed to promote a sustained recovery in the labor market."
Bernanke said improvement in the job market is likely to remain "frustratingly slow," the same phrase he used a year ago to describe the economy. The Fed's forecast predicts the unemployment rate will still be stuck above 7% or higher at the end of 2014.
Bernanke noted concerns about economic growth, saying that after a 2.5% gain in gross domestic product for the second half of 2011, growth slowed to less than 2% in the first quarter of 2012, and he pointed to a "still smaller gain in the second quarter."
Independent economists have been slashing their forecasts for economic growth recently given weak hiring, foreign trade and retail sales.
"The U.S. economy has continued to recover, but economic activity appears to have slowed somewhat during the first half of this year," Bernanke said.
But the Fed Chairman had better news on inflation, saying that the lower price of oil has brought inflation down to a manageable level.
Bernanke was mildly positive about the housing sector, saying that new and existing housing sales have been gradually trending upward since last summer.
But he noted the large number of vacant homes is still elevated, and that while lending standards are tight, at the same time households are concerned about their jobs and finances. A significant number of households are still "underwater" on their mortgages, meaning they owe more than their houses are worth.
Bernanke said the most effective way Congress could help support the economy right now would be to address the nation's fiscal challenges in a way that won't harm the recovery, but takes into account "long run sustainability" of the economy.
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