Economy Recovering, but More Hurdles Ahead
Federal Reserve Chairman Ben Bernanke was on Capitol Hill today to deliver his latest assessment of the economy.
And he sees some hopeful signs that the end of the recession is in sight, as CBS News correspondent Anthony Mason reports.
The Fed chairman's latest diagnosis for the sick economy: the patient is improving:
"The pace of decline appears to have slowed significantly," Bernanke said today.
In one promising sign, a key index of leading economic indicators which plunged late last year is now rocketing back up:
The indicators are "emphatic," said economist Lakshman Achuthan of Economic Cycle Research Institute that "recovery begins this summer."
But Achuthan warns that, for many, it won't feel like a recovery:
"We lost well over 7 million jobs in this recession," he said, "and we will not get them back for years."
A critical shopping season is approaching - back to school - and a third of parents say they plan to spend less this year. That could mean more shuttered shops and trouble for the owners of shopping malls. Even along New York's Madison Avenue, some of America's priciest real estate, 15 percent of the stores are now vacant or about to be.
Rep. Barney Frank, D-Mass., raised the looming threat of a commercial real estate meltdown.
"Mr. Chairman, we are watching that situation very carefully," Bernanke said.
Bruce Mosler, CEO of the global property manager Cushman & Wakefield says $800 billion of commercial mortgages for office buildings, malls, hotels will be coming due in the next year and half - and many won't be able to make the payments:
"The commercial real estate industry is at an inflection point," he said and without some kind of help, "You have mortgage defaults. And that's the last thing that we need to stall the recovery."
But the markets seem to be betting on recovery. The Dow rallied for the seventh straight day and is now back in positive territory for the year.
