U.S. Federal Reserve Chairman Ben Bernanke on Tuesday offered some hope that the 16-month-old recession may be losing some of its severity and he is “fundamentally optimistic” about the U.S. economy’s longer term prospects.

In speech delivered at Morehouse College in Atlanta, Bernanke cited recent figures on housing, consumer spending, and new vehicle sales as some of those signs that the recession is slowing.

“Recently we have seen tentative signs that the sharp decline in economic activity may be slowing, for example, in data on home sales, homebuilding, and consumer spending, including sales of new motor vehicles. A leveling out of economic activity is the first step toward recovery,” Bernanke said.

“Today’s economic conditions are difficult, but the foundations of our economy are strong, and we face no problems that cannot be overcome with insight, patience, and persistence,” he said.

Bernanke stressed that there will not be a “sustainable recovery without a stabilization of our financial system and credit markets.”

“We are making progress on that front as well, and the Federal Reserve is committed to working to restore financial stability as a necessary step toward full economic recovery,” he concluded.

IE