Federal Reserve Chairman Ben Bernanke told lawmakers Wednesday that the U.S. expansion will remain moderate as the economy contends with weak construction spending and high unemployment.

"Significant restraints on the pace of the recovery remain, including weakness in both residential and nonresidential construction and the poor fiscal condition of many state and local governments," Bernanke told the Joint Economic Committee of Congress.

"Consumer spending should be aided by a gradual pickup in jobs and earnings, the recovery in household wealth from recent lows, and some improvement in credit availability," the Fed chairman said.

Even so, "a significant amount of time will be required to restore the 8 1/2 million jobs that were lost during the past two years," he added.

Bernanke also reiterated his call for lawmakers to set a path of reducing the federal budget deficit, which the Obama administration estimates will hit a record $1.6 trillion in the year ending Sept. 30.

"Addressing the country's fiscal problems will require difficult choices, but postponing them will only make them more difficult," Bernanke said.

- Bloomberg News

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