Fed says economy improving, Japanese growth revised up

Reuters reports Fed chairman Ben Bernanke's testimony to House of Representatives Budget Committee.

Federal Reserve Chairman Ben Bernanke said on Wednesday the U.S. economic recovery was on a solid footing but cautioned it could be years before the jobs lost during the deep recession of 2008-2009 are restored.

While Bernanke said the economy had made an "important transition" to relying less on government support, his emphasis on the struggles of the U.S. jobs market suggested the central bank was in no rush to raise interest rates...

Bernanke said the economic recovery's reliance on government spending would probably diminish over time, while increasing private demand would take over the job of stimulating growth, as recent data showed.

That view was bolstered by a report from the Fed that said the economy strengthened last month, even as worries about Europe's debt crisis dented confidence.

"Economic activity continued to improve since the last report across all twelve Federal Reserve districts, although many districts described the pace of growth as 'modest'," the Fed said in its Beige Book, an anecdotal report on economic conditions.

Meanwhile, Japan's recovery is looking surprisingly robust. Bloomberg reports today that the government has revised up first quarter growth slightly.

Japan’s economy expanded more than initially estimated in the first quarter as consumer spending and housing investment rose at a faster pace.

Gross domestic product rose at an annual 5 percent rate in the three months ended March 31, quicker than the 4.9 percent reported in preliminary figures last month, the Cabinet Office said today in Tokyo. The median estimate of 18 economists surveyed by Bloomberg News was for 4.2 percent. None of the analysts predicted quicker growth.

On Wednesday, Bloomberg had reported a rise in Japanese machinery orders in April.

Japanese machinery orders rose more than economists estimated, signaling companies are preparing to spend again as the economy recovers and earnings rebound.

Orders, an indicator of business investment in three to six months, climbed 4 percent in April from March, a second straight increase, the Cabinet Office said today in Tokyo. The median forecast of 27 economists surveyed by Bloomberg News was for a 1.7 percent gain.