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Employment grew solidly for a third straight month in February, a sign the economic recovery was strengthening and in less need of further monetary stimulus from the Federal Reserve.

Employers added 227,000 jobs to their payrolls last month, the Labor Department said on Friday, while the unemployment rate held at a three-year low of 8.3 percent even as people flooded back into the labor force to hunt for jobs.

Not only was job growth a bit stronger than the 210,000 economists polled by Reuters had expected, but the government said 61,000 more jobs were created in December and January than previously thought.

Nonfarm payrolls have now grown by more than 200,000 for three months in a row - bolstering President Barack Obama’s chances for re-election. Employment growth has averaged 245,000 a month over the last three months.

“It looks like the economy is starting the year with some positive news for consumers and households,” said Gary Thayer, chief macro strategist at Wells Fargo Advisors in St. Louis.

“The trend is toward better jobs data with companies showing more conviction that the economy is finally gaining strength.”

Stocks opened modestly higher on the report, while prices for Treasury debt fell as traders dialed down the prospects for more bond buying by the Fed. The dollar rallied broadly.

“I think we’ll begin to … debate about the Fed exiting its ultra-accommodative policy stance sooner than expected,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.

A second report on Friday showed the trade deficit widened 4 percent on high oil prices and record imports, which will weigh on domestic growth.

Manufacturing, which in January recorded the largest jobs gain in a year, had another sturdy performance in February and there was also strong demand for temporary help, a potential harbinger of future permanent hiring.

Although the labor market is gaining some muscle, the pace of improvement remains too slow to do much to absorb the 23.5 million Americans who are either out of work or underemployed.

Fed Chairman Bernanke last week described the jobs market as “far from normal” and said continued improvement would require stronger demand for U.S. goods and services.

Still, he suggested the outlook would have to deteriorate for the central bank, which meets next week, to launch another round of bond buying to drive interest rates lower.

The employment report added to the list of data highlighting the economy’s underlying strength.

The data also provided a hopeful sign for the global recovery with growth slowing in China and the euro zone sliding into recession. The jobless rate in the 17-nation euro zone area rose to 10.7 percent in January, the highest since the euro started circulating in 2000.

NUMBERS GOOD FOR OBAMA

In contrast, the unemployment rate has dropped 0.8 percentage point since August, providing some relief to Obama, who faces an election battle in which the economy has been center stage faxless payday loans.

Economists predict the jobless rate could fall below 8 percent by the November election, even if the recent firming in the jobs market lures Americans who have given up the search for work back into the labor force.

The labor force participation rate - the percentage of working-age Americans either with a job or looking for one - rose to 63.9 percent from 63.7 percent in January, suggesting Americans are growing more optimistic on job prospects.

The increase in size of the workforce was the largest since April 2010.

White House economic adviser Alan Krueger said the report provided “further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression.”

Republicans were less forgiving.

“While there is some good news in this report, it is hard to celebrate while so many Americans remain out of work and those who do have a job haven’t seen a raise in years,” said Republican Representative Dave Camp, the chairman of the House of Representatives Ways and Means Committee.

While some parts of the jobs market have benefited from unseasonably warm winter weather, economists say a genuine improvement is under way, even though they expect a slight pull back in March.

Private companies again accounted for all the job gains in February, adding 233,000 positions. Government employment fell a modest 6,000, declining for a sixth straight month.

Manufacturers hired 31,000 new workers, with all the gains concentrated in the segment that produces long-lasting goods.

Auto companies, which have stepped up production, are taking on new workers and adding shifts and overtime to meet pent-up demand after production was disrupted early last year following the tsunami and earthquake in Japan.

Factory employees worked more hours last month, helping to lift the average hourly earnings for all workers by three cents in February.

Average hourly wages increased 1.9 percent in the 12 months through February, suggesting little wage inflation even though unit labor costs grew much more strongly than initially thought in the third and fourth quarters of 2011.

The overall workweek held steady at 34.5 hours - holding at the highest level since August 2008.

Outside manufacturing, construction payrolls fell 13,000, the first decline in four months. Temporary hiring, seen as a harbinger for permanent hiring, added 45,200 jobs in February after rising 32,100 the prior month.

Although hiring has quickened, the economy faces persistent long-term unemployment. In February, about 43 percent of the 12.8 million unemployed Americans had been out of work for more than six months.

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The Treasury Department said Wednesday it is selling $6 billion worth of the $41.8 billion in common stock it holds in insurance giant American International Group Inc., which received the biggest bailout of the financial crisis in 2008.

The stock sale is a step by the government toward disentangling itself from AIG. It still owns 77 percent of the company’s common shares. Treasury said AIG plans to buy as much as $3 billion of the stock being sold.

Treasury also said it has a deal with AIG for it to repay the government’s remaining $8.5 billion preferred-stock investment in the company.

A price for the common shares wasn’t specified. AIG shares closed at $29.45 in trading Wednesday. The share price at which taxpayers would break even on their AIG investment is about $28 or $29.

The government stepped in with $182 billion to rescue New York-based AIG from collapse in the depths of the financial crisis. Treasury has recouped $18 billion of the $68 billion it provided the company through its Troubled Asset Relief Program, or TARP. The remainder of the money came from the Federal Reserve Bank of New York. AIG has repaid all but $17.5 billion of those loans.

Treasury made an initial sale of AIG stock in May 2011. The sales were expected to resume after the value of AIG shares increased. Last year, the stock lost nearly half its value, partly fueled by government sales of the company’s stock and a volatile stock market.

Under the agreement for repaying the $8.5 billion preferred-stock investment plus interest, $5.6 billion will come from AIG’s newly announced sale of part of its stake in Hong Kong-based insurer AIA Group Ltd., $1.6 billion from a sale of securities by the New York Fed, and another $1.6 billion from AIG’s sale of its American Life Insurance Co. subsidiary.

“The people of AIG have achieved another significant milestone in our progress toward our goal that American taxpayers recoup their entire investment in AIG at a profit,” AIG President and CEO Robert Benmosche said in a statement.

AIG had a $19.8 billion profit in the fourth quarter of last year, nearly all of it due to a tax-related accounting gain. The company also earned $17.8 billion for 2011, its second straight year of profits.

Despite the two years of profitability, AIG’s recent financial results have been inconsistent. Over the past two years, only half of its quarterly reporting periods have been profitable.

Treasury said it has hired Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and Morgan Stanley & Co. LLC as joint coordinators for the common stock sale.

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Consumers earned a little more in January and spent most of the extra money. The gains should keep the economy growing at a modest pace.

The Commerce Department said Thursday that consumer spending increased 0.2 percent in January. That’s also better than December’s reading of no change.

Americans’ income rose 0.3 percent, the second straight monthly increase.

Income barely kept pace with inflation last year. So the increases are a positive sign that consumers will have more money to spend.

Stronger hiring in December and January, rather than pay raises, helped boost income. Still, that trend should fuel more consumer spending and support solid growth for the economy in coming months. Consumer spending accounts for 70 percent of economic activity.

Economists are worried that Americans might cut back on spending if their paychecks don’t increase this year.

Incomes were much higher in the second half of last year than previously thought, the Commerce Department said Wednesday. Still, even with the revision, after-tax incomes adjusted for inflation rose only 1.3 percent in 2011. Except for the recession year of 2009, when incomes fell, that’s the smallest annual growth in incomes since 1991.

Consumer spending rose 2.1 percent in the final three months of last year, and economists expect a similar increase in the current quarter. That should help the economy expand at about a 2 percent pace in the January-March period.

Most economists expect growth should rise to 2.5 percent this year. That would be healthy in most years but is modest coming after the worst recession since World War II.

The increase in income stems from more hiring, greater overtime and small pay gains. Employers added 243,000 jobs in January, the most in nine months. The unemployment rate has fallen for five straight months, to 8.3 percent.

Manufacturing workers worked more overtime in January. And average hourly earnings rose 4 cents to $23.29, the Labor Department said earlier this month.

Other changes may also boost incomes. About 55 million Social Security recipients will get a 3.6 percent increase in their benefit checks, intended to offset rising inflation last year.

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The Federal Reserve Bank of New York bought the building at 33 Maiden Lane for $207.5 million from Merit US Real Estate Fund III, LP, according to a statement on the district bank

As any driver knows, rising gas prices can put a dent in a household budget. For small business owners, it can hurt _ or even wipe out _ profits.

The recent rise in the price of gas is pressuring business owners to find ways to protect their earnings. Some of their strategies are simple, such as using GPS devices to track fuel usage. Others are drastic _ like moving manufacturing operations to the U.S. from Asia.

Small business owners have navigated this road before _ most recently in 2008 when the price of gas rose to a national average of $4.11 a gallon. But gas is expected to surpass that record and reach $4.25 by late April. And even if the price follows its usual pattern of gradually falling back from a high reached in the spring, it will still be expensive for the rest of the year.

Here’s a look at how some companies are coping:

A DIRECT HIT

Chris Hundley runs Limousine Connection, a 31-car limousine service in Los Angeles. He likens the surge in gas prices to “being run into by someone without insurance” _ there’s no way to avoid having to pay.

In 2007 Limousine Connection began adding a 3 percent fuel surcharge to its bills to offset the cost of gas. Since then, the rate has crept up to 10 percent. Hundley says customers have come to understand the necessity for a fuel surcharge, and prefer it to a rate increase.

But the company doesn’t start charging extra on its base hourly rate the minute gas prices rise. For customers that have contracts with Limousine Connection, he’ll wait 30 days, and until prices have gone up 10 percent, before raising the surcharge. If prices rise, say, only 7 percent, he won’t raise it. “We are eating it _ it’s the cost of doing business,” he says.

Hundley also tracks fuel usage. Speeding or idling for extended periods wastes gas, so Hundley monitors driver behavior using the GPS systems installed in his fleet. When the company detects wasteful patterns a manager sits down with the employee to explain how he can help the company keep down fuel expenses. Limousine Connection is so serious about saving gas that, in some cases, it has issued verbal warnings to some drivers.

Hundley also has added more fuel-efficient vehicles to its fleet. The company has some hybrids, and all except a few Mercedes use regular, rather than premium, gas.

CHEAPER TO MAKE IT IN THE U.S.

The rising cost of jet fuel has convinced Seesmart Inc. to make the commercial and household lights that it sells in U.S. factories instead of Asia. Ray Sjolseth, president of the Simi Valley, Calif.-based company, says that the savings he used to get from manufacturing overseas is being wiped out by higher air freight rates.

Sjolseth says his customers tend to have last-minute deadlines. “We don’t have a choice but to air freight the products,” he says He estimates that 80 percent of his goods are shipped by air and that rising rates are raising his manufacturing costs between 5 percent and 8 percent.

So Sjolseth’s solution is to move his manufacturing to the U.S. He currently has one factory in California and expects to have one in Chicago operating by the end of the year. He estimates that a year from now, he’ll save between 5 percent and 10 percent because he won’t be getting shipments by air.

SHIFTING RESOURCES

Higher gas prices are cutting into travel budgets and that’s hurting Towne Park Systems’ revenue. The Annapolis, Md., company runs valet parking services for hotels across the country. These days, fewer guests are parking cars in hotel lots so the hotels don’t need as many attendants.

Town Park responded by shifting some staffers to different jobs, says Kirk Pozadzides, the company’s general manager. The company also provides concierge and other services for hotel guests. Now, the employee who parks cars may shift to working as a concierge.

The company also added “park and fly” services. Towne Park finds unused spaces in garages near airports, and shuttles passengers to airline terminals. It costs a traveler less to use the service than it does to park in an airport lot, Pozadzides says.

“You have to find creative ways to artificially drive revenue,” he says.

WORKING WITH VENDORS

The surge in gas prices in 2008 was a shock for Capriotti’s, a chain of sandwich shops based in Las Vegas. CEO Ashley Morris says the company didn’t pay much attention to a clause in his company’s contracts with distributors that said Capriotti’s would pay more for deliveries if the price of gas went up. So when gas soared that spring and summer, the company was paying far more than it expected for food, paper products and other supplies.

“It hit our business fairly hard,” Morris says.

Now, the surcharge rises and falls based on the price of diesel gas. This time around, he says, Capriotti’s won’t suffer. “We heavily negotiated a sliding scale.”

DELIVERY DILEMMA

Companies that make deliveries are also hurting. Ricky Eisen’s catering business in New York has two trucks and a van. She used to pay $40 to $60 a day for gas for each truck. Now it costs her $72 to $76. And she pays more to vendors for deliveries.

“I’m getting squeezed at both ends,” says Eisen, owner of Between the Bread. “It’s enough to cut a dent in the profit.”

Eisen held out for a long time _ until March 2011 _ before she began tacking on fuel surcharges for her deliveries. She has charged 5 percent extra. Now, she says, “I’m thinking as fuel prices rise, I’m going to have to increase the percentage. Right now, I want to keep it where it is.”

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Can the market sustain its rally, or will prospects of a Greek default shatter investors’ risk appetite?

The Dow Jones Industrial Average () closed at its highest level since 2008 Friday. For the year, the Dow is up almost 6%, and the S&P 500 () is up more than 8%. The Nasdaq () has made an impressive 13% run.

Yet, the possibility of a Greek default looms large over world markets. European finance ministers will meet Monday, and are expected to sign off on Greece’s latest economic reform proposal.

Greece needs that sign off from Europe’s finance ministers to avoid defaulting on a €14.5 billion bond payment due March 20. Another delay is unlikely to rattle the markets, but if it becomes clear that Greece will default, markets strategists fear a sharp sell-off.

"Markets have priced in a positive outcome," said Joseph Tanious, global market strategist at J.P. Morgan Asset Management.

All three indexes posted solid gains for the week, as investors largely ignored concerns over Greece and focused squarely on better-than-expected economic reports in the United States. The S&P was up 1.4%.

With few key economic reports on the agenda this week, and U.S. markets closed Monday in observance of Presidents’ Day, investors will keep an eye on quarterly earnings from major retailers to assess the health of the American consumer fast payday loan no faxing.

"There will be a heightened sensitivity to retailers and their earnings to either confirm that the U.S. economy is picking up and recovering or cast a doubt on the consumer’s appetite," said Tanious.

On Tuesday, retailers Barnes & Noble (, Fortune 500), Home Depot (, Fortune 500), Macy’s (, Fortune 500), Wal-Mart (, Fortune 500) and Saks () will report quarterly results.

On Thursday, Kohl’s, Sears (, Fortune 500), Target (, Fortune 500) and Gap (, Fortune 500) will report.

On Friday, J.C. Penney (, Fortune 500) will release its earnings.

Other quarterly earnings due out next week include Dell (, Fortune 500) and Kraft (, Fortune 500) on Tuesday and Hewlett-Packard (, Fortune 500) on Wednesday

Meanwhile, investors will continue to monitor developments in Iran to determine whether concerns over the country’s nuclear program will drive up the price of oil.

U.S. crude oil rose 3% last week to close at $102.35, and economists worry that further increases in oil prices could threaten the global economy.

"I’m watching oil with trepidation," said Ram Bhagavatula, partner at the hedge fund Combinatorics Capital. "It’s the one thing that could threaten the recovery." 

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Iran is poised to greatly expand uranium enrichment at a fortified underground bunker to a point that would boost how quickly it could make nuclear warheads, diplomats tell The Associated Press.

They said Tehran has put finishing touches for the installation of thousands of new-generation centrifuges at the cavernous facility _ machines that can produce enriched uranium much more quickly and efficiently than its present machines.

While saying that the electrical circuitry, piping and supporting equipment for the new centrifuges was now in place, the diplomats emphasized that Tehran had not started installing the new machines at its Fordo facility and could not say whether it was planning to.

Still, the senior diplomats _ who asked for anonymity because their information was privileged _ suggested that Tehran would have little reason to prepare the ground for the better centrifuges unless it planned to operate them. They spoke in recent interviews _ the last one Saturday.

The reported work at Fordo appeared to reflect Iran’s determination to forge ahead with nuclear activity that could be used to make atomic arms despite rapidly escalating international sanctions and the latent threat of an Israeli military strike on its nuclear facilities.

Fordo could be used to make fissile warhead material even without such an upgrade, the diplomats said.

They said that although older than Iran’s new generation machines, the centrifuges now operating there can be reconfigured within days to make such material because they already are enriching to 20 percent _ a level that can be boosted quickly to weapons-grade quality.

Their comments appeared to represent the first time anyone had quantified the time it would take to reconfigure the Fordo centrifuges into machines making weapons-grade material.

In contrast, Iran’s older enrichment site at Natanz is producing uranium at 3.4 percent, a level normally used to power reactors. While that too could be turned into weapons-grade uranium, reassembling from low to weapons-grade production is complex, and retooling the thousands of centrifuges at Natanz would likely take weeks.

The diplomats’ recent comments came as International Atomic Energy Agency inspectors are scheduled to visit Tehran on Sunday. Their trip _ the second this month _ is another attempt to break more than three years of Iranian stonewalling about allegations that Tehran has _ or is _ secretly working on nuclear weapons that would be armed with uranium enriched to 90 percent or more.

Diplomats accredited to the IAEA expect little from that visit. They told the AP that _ as before _ Iran was refusing to allow the agency experts to visit Parchin, the suspected site of explosives testing for a nuclear weapon and had turned down other key requests made by the experts.

Iranian officials deny nuclear weapons aspirations, saying the claims are based on bogus intelligence from the U.S. and Israel.

But IAEA chief Yukiya Amano has said there are increasing indications of such activity. His concerns were outlined in 13-page summary late last year listing clandestine activities that either can be used in civilian or military nuclear programs, or “are specific to nuclear weapons.”

Among these were indications that Iran has conducted high explosives testing and detonator development to set off a nuclear charge, as well as computer modeling of a core of a nuclear warhead. The report also cited preparatory work for a nuclear weapons test and development of a nuclear payload for Iran’s Shahab 3 intermediate range missile _ a weapon that could reach Israel.

Iran says it is enriching only to make nuclear fuel. But because enrichment can also create fissile warhead material, the U.N. Security Council has imposed sanctions on Tehran in a failed attempt to force it to stop.

More recently, the U.S., the European Union and other Western allies have either tightened up their own sanctions or rapidly put new penalties in place striking at the heart of Iran’s oil exports lifeline and its financial system.

The most recent squeeze on Iran was announced Friday, when SWIFT, a financial clearinghouse used by virtually every country and major corporation in the world, agreed to shut out the Islamic Republic from its network.

Diplomats say the choke-holds are being applied in part to persuade Israel to hold off on potential military strikes on Iranian nuclear facilities _ among them Fordo, a main Israeli concern because it is dug deep into a mountain and could be impervious to the most powerful bunker busting bombs.

Diplomats told the AP earlier this month that Iran had added two new series or cascades of old-generation IR-1 centrifuges to its Fordo operation, meaning 348 centrifuges were now operating in four cascades.

Olli Heinonen, who retired last year as the IAEA’s chief Iran inspector, recently estimated that these machines, and two other cascades at Natanz can produce around 15 kilograms (more than 30 pounds) of 20-percent enriched uranium a month, using Iran’s tons of low-enriched uranium as feedstock.

The low and higher enriched uranium now being produced “provides the basic material needed to produce four to five nuclear weapons,” Heinonen said.

But he suggested “an altogether different scenario” _ a much quicker pace of enrichment to levels easily turned into weapons-capable uranium if Iran starts using newer, more powerful centrifuges at Fordo. That, said the diplomats, is exactly what Iran appears to be on the verge of doing by finishing preparatory work recently for new centrifuge installations.

Fordo, which can house 3,000 centrifuges, was confidentially revealed to the IAEA by Iran in 2009, just days before the U.S. and Britain jointly announced its existence.

Iran announced last year that it would move its 20-percent uranium production to Fordo from Natanz and sharply boost capacity. It started making higher grade material two years ago saying it needed it to fuel a research reactor.

But the U.S. and others question the rationale, pointing out that Iran rejected offers of foreign fuel supplies for that reactor and is making more of the higher-enriched material than that small reactor needs.

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A number of top Federal Reserve officials likely saw a need for additional monetary easing at the central bank’s meeting last month, although there are few signals the central bank will move soon.

Minutes from the Fed’s January meeting, which will be released on Wednesday, should offer more insight than usual into where officials stand on the question of whether more bond purchases are warranted to help a still-frail economy.

While the minutes always give a flavor of the policy debate, the central bank for the first time will provide “qualitative” details on officials’ views on the Fed’s near-record $2.9 trillion balance sheet.

This new information — a counterpart to the first-ever interest rate projections released last month — could suggest a greater willingness to ease further than was evidenced following the meeting. Last month, the Fed said it would likely leave rates near zero until at least late 2014, but offered no details on how it should handle its asset holdings.

The prospects for further easing appeared to be dampened by the latest employment figures, which showed a healthier job market than economists had expected. Still, many feel the economy is unlikely to gain enough vigor this year to satisfy the Fed, and they look for a third round of quantitative easing, probably through purchases of mortgage bonds.

“I doubt the qualitative information from participants on the balance sheet would sway decisively on the near-term prospect of QE3,” said Thomas Lam, an economist at OSK-DMG. “While the hurdle for QE3 seems lower, I don’t view this policy option as imminent at this time.”

Speaking before a group of home builders on Friday, Fed Chairman Ben Bernanke stayed away from any explicit references to monetary policy, but made clear he still does not see the pace of economic growth as sufficient or satisfactory.

“The state of housing has been an impediment to a faster recovery,” he said. “We need to continue to develop and implement policies that will help the housing sector get back on its feet.”

The projections from Fed officials on when interest rates should rise off the floor were all over the place, ranging from this year to 2016. Given varying appetites within the Fed’s policy committee for expanding or shrinking the central bank’s portfolio, the minutes will likely put even more daylight between inflation hawks and doves.

Analysts are not expecting any hard data on balance sheet expectations but rather broad-brush descriptions of policymakers’ leanings. The minutes could say, for instance, that some members favor additional stimulus now, while others would rather take a wait-and-see approach.

There is also a risk that the markets could get a hawkish surprise, for instance, if some officials appear to be making the case for near-term asset sales.

“It will be an interesting trading day when this ‘qualitative information’ begins to include ruminations about when to start shrinking the nearly $3 trillion balance sheet and whether such shrinkage will happen through passive asset run-off or active asset sales,” said Dana Saporta, an economist at Credit Suisse.

Bernanke has said that when the Fed chooses to tighten policy it will first raise the interest it pays on bank reserves, currently at 0.25 percent, only later resorting to selling some of the assets it accumulated in response to the financial crisis.

But not all officials may agree.

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Federal Reserve Chairman Ben Bernanke on Friday issued a call to action to restore housing markets, saying depressed house prices and sales are a serious drag on the economic recovery.

“The state of housing has been an impediment to a faster recovery,” he told a home builders’ conference.

“We need to continue to develop and implement policies that will help the housing sector get back on its feet,” Bernanke said, laying out a few ideas from a recent Fed “white paper” on housing.

Bernanke’s recommendations for potential policy remedies fly in the face of complaints from some Republicans lawmakers that the Fed was making an unwarranted intrusion onto the turf of other policymakers.

The white paper, issued last month, was the result of several months of study by a Fed staff on a problem officials at the central bank have concluded is a key missing ingredient to a healthier economic recovery.

In his speech, Bernanke touched only on some of the less controversial ideas broached by the Fed in the paper.

He called on lenders and regulators to look at rules and practices that may hold back the origination of sound mortgages, pointing at overly tight credit as one reason the housing recovery has been slow.

An overhang of vacant homes and a glut of foreclosures is also weighing on housing activity, Bernanke added. He said it could make sense in some markets to turn some of the foreclosed homes into rental properties, a policy the Obama administration is already pursuing.

Another top Fed official - Cleveland Federal Reserve Bank President Sandra Pianalto - also pointed at housing on Friday as a key impediment to a stronger recovery, calling it “a significant headwind.”

Pianalto, who is a voter this year on the Fed’s policy-setting panel, said declines in housing wealth were keeping consumers away from stores and making harder for businesses to borrow. Bernanke said the loss of housing wealth may be chopping $200 billion to $375 billion off of consumer spending per year.

Several Fed officials have come forward since the white paper was released to push for action, although it has caused discomfort in some quarters of the central bank’s system.

Bernanke made the case that overly tight credit in mortgage markets had undercut the effectiveness of the Fed’s aggressive efforts to stimulate growth.

The Fed cut overnight interest rates to near zero in 2008 and has bought $2.3 trillion in bonds in a further effort to drive mortgage and other borrowing costs lower.

In a typical recovery, a rebound in housing fuels hiring and income gains, but that has not been the case this time, Bernanke said.

In the face of the congressional criticism of the white paper, Bernanke recently told lawmakers he was sorry if the central bank’s efforts were misunderstood as anything but a helpful effort to spell out policy options.

He defended the study again on Friday.

“One of our main objectives … was simply to make people aware how central to the recovery housing is,” Bernanke said in response to a question from the audience.

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The Federal Reserve’s announcement that it is unlikely to raise its benchmark interest rate until late 2014 is simply its “best guess,” Ben Bernanke said Wednesday.

The Fed chairman made clear during a news conference Wednesday that the decision to leave interest rates unchanged for three more years was not ironclad.

The central bank’s ability to forecast that far out is limited, Bernanke says, and the Fed could adjust the time frame for when it will raise rates if economic conditions change.

Still, he said the U.S. economy remains weak and that all signs suggest the Fed won’t change its record-low rate for another three years.

“Unless there is a substantial strengthening of the economy in the near term, it’s a pretty good guess we will be keeping rates low for some time,” Bernanke said after the Fed concluded its two-day policy meeting.

The central bank has kept its key rate at a record low near zero for about three years.

Bernanke also said the Fed has not ruled out bolder steps to boost economic growth, such as a third round of bond purchases.

“If inflation is going to remain below target for an extended period and unemployment progress is very slow … there is a case for additional policy action,” he said.

“I would not say we are out of ammunition no teletrack payday loan. We still have tools.”

Prior to the news conference, the Fed downgraded its outlook for U.S. economic growth this year. It forecasts the economy to grow between 2.2 percent and 2.7 percent in 2012, according to its updated economic forecasts. That’s down from November’s forecast of between 2.5 percent and 2.9 percent.

Many economists expect Europe will suffer a recession this year, which will slow U.S. growth.

Still, the Fed said it expects unemployment to fall low as 8.2 percent. That’s an improvement from November’s bottom rate of 8.5 percent.

In December, the unemployment rate fell to 8.5 percent _ the lowest level in nearly three years _ after the sixth straight month of solid hiring.

Inflation has been relatively tame and the Fed doesn’t see that changing over the next three years.

Bernanke refused to answer a question asking whether he would resign if one of his Republican critics is elected president.

“As long as I have a job to do, I’m going to do everything to help the Federal Reserve. That’s my answer,” he said.

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