The Fed chairman said there will be a “bit of a hit” on growth, but not enough to outweigh other positive trends. “[A]t this level we don't think yet that, particularly given the other good news we've seen in labor markets and so on, we don't think it's going to be anything that's going to stall the recovery,” Bernanke said.
The economy added 227,000 jobs in February, according to the Labor Department, the third straight month of gains of at least 200,000.
Bernanke, noting that gasoline prices frequently follow a seasonal pattern, predicted prices over the next couple of months or so will rise “somewhat further.”
“After that, if oil prices stay where they are or come down as some people think they will, we should see some relief,” he said. “But that's a guess.”
Bernanke acknowledged that turmoil in the Middle East remains a wild card.
Analysts say that an Israeli strike against Iran’s nuclear facilities would send oil prices sharply higher, and boost U.S. gasoline costs along with them, perhaps reaching into the $5-$6-per-gallon range.
“Now of course, you know, we have to watch what's happening there. The Middle East is very unpredictable lots of things happening with respect to Iran and so on, so you know, we obviously need to be very attentive to that,” he said.
“But to this point while it certainly is a major hardship for lots of people, we don't see it as really endangering the economic recovery,” Bernanke said of the pump prices.