Scott J. Brown Ph.D., Chief Economist Raymond James Investment Services

In addition to the mostly positive corporate earnings reports this week, the focus fell on Federal Reserve Chairman Ben Bernanke’s monetary policy testimony – before the Senate Banking Committee on Wednesday and in front of the House Financial Services Committee on Thursday. While he didn’t offer anything new in support of the economy, he assured the legislators the Fed remains “prepared to take further policy actions as needed.”

In prepared remarks, Bernanke said the economy is “proceeding at a moderate pace.” On the positive side, he noted that business and household demand is rising, but that housing and commercial construction are weak – and that continuing job market weakness is holding back consumer demand. It will require “a significant amount of time” to recoup the 8.5 million jobs lost in 2008 and 2009, he said, citing the latest Fed projections that show reducing unemployment “is now expected to be somewhat slower than we previously projected.” Unemployment may stand between 7% and 7.5% at the end of 2012, he said.

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