US downturn danger fading, says Fed chief

The danger of the US economy tumbling into a “substantial downturn” appears to have waned despite a recent increase in unemployment figures, Federal Reserve chairman Ben Bernanke said early today.

Addressing a Fed conference in Chatham, Massachusetts, Mr Bernanke said a government report last week showing the unemployment rate rising from 5 to 5.5% in May – the biggest one-month jump in two decades – was “unwelcome”, but other forces should “provide some offset to the headwinds that still face the economy”.