Bernanke's focus on the weak job market and his opinion that inflation will remain subdued shows that he is looking to keep the Fed focused on supporting growth for quite a while longer by leaving interest rates at rock-bottom levels. Financial markets may be soaring and the economy expanding. But, he said, “the best thing we can say about the labor market right now is that it may be getting worse more slowly.”

Speaking at the Economic Club of New York, Bernanke also offered rare remarks about the value of the U.S. currency, saying the Fed's policies will “help ensure that the dollar is strong.” Stepping into an arena usually reserved for Treasury secretaries, he signaled that the central bank is paying close attention to the dollar's rapid decline and lent some of his own credibility to Obama administration efforts to maintain confidence in the dollar on international markets.

Bernanke's remarks about the dollar came one day after China's top bank regulator criticized the Fed's handling of monetary policy, blaming the weak dollar and low interest rates for creating a global bubble in asset prices. The U.S.-China economic relationship is under particular scrutiny this week as President Obama visits Beijing. China is the largest foreign holder of U.S. government debt and thus would be exposed to massive losses if the dollar were to plummet. The overriding takeaway from his speech, however, was that the Fed should continue aggressive efforts to stimulate economic activity.

“Continued growth next year is likely,” Bernanke said. But he added, “Some important headwinds — in particular, constrained bank lending and a weak job market — likely will prevent the expansion from being as robust as we would hope.”

In the past week, several other Fed officials have given their views of the economic outlook, voicing a range of concerns. Some view the economy as fundamentally weak and see little reason to fear rising prices as long as the jobless rate is high. But others have argued the Fed should soon reverse direction, raising interest rates before there is much improvement in economic conditions, lest there be a burst of inflation.

Bernanke's comments position him in the center. He agrees with those who see a weak recovery and think inflation is unlikely to be an immediate threat. Bernanke, however, did give a nod to concerns about rising prices in the future, noting that expectations of inflation can “be early warnings of actual inflation” and “must be monitored carefully.”

“He touched a lot of bases and acknowledged a lot of concerns but didn't really sway from the central view that there will be moderate growth and subdued inflation,” said Peter Hooper, chief economist for Deutsche Bank Securities.

The jobless rate rose to 10.2 percent in October and is widely forecast to keep edging upward. Indeed, as Bernanke said Monday, “the unemployment rate will decline only slowly if economic growth remains moderate, as I expect.”

Bernanke emphasized the human toll of the continued weak job market, noting the astronomical unemployment rates among some subsets of the labor force, such as the 19 percent jobless rate among 16-to-24-year-olds. This widespread unemployment among young adults could have long-lasting implications, he said, as they lose out on work experience and on-the-job training.

In addressing the dollar, Bernanke said the recent decline is partly due to investors who had poured money into the safety of U.S. currency during the depths of the financial crisis and are now more comfortable investing elsewhere. The dollar is down 16 percent against a basket of other major currencies since March 5. That decline has helped make U.S. exports more competitive but has raised fears that what has been an orderly decline could become a rout.

“We are attentive to the implications of changes in the value of the dollar and will continue to formulate policy to guard against risks to our dual mandate to foster both maximum employment and price stability,” Bernanke said. He said that Fed policy will help ensure that the dollar is strong and a “source of global financial stability.” Also Monday, in a sign that the economic expansion is continuing this fall, the Commerce Department reported that retail sales in October grew 1.4 percent compared with the previous month, driven by a jump in auto sales.

Car sales had spiked over the summer because of the government's popular “cash for clunkers” program, which gave consumers with certain trade-ins a credit of up to US$4,500 toward the purchase of a new, fuel-efficient vehicle. But sales slumped in September after the stimulus ended. Analysts said sales were returning to normal in October.

General merchandise and department stores also got a lift last month, rising 0.8 percent. Restaurants had a 1.2 percent rise, while health-care stores' sales were up 0.5 percent. But several long-suffering categories continued to experience sales declines. Electronics stores fell 0.6 percent, furniture retailers were down 0.8 percent, and building materials dropped 2.4 percent.

Still, the overall increase was higher than anticipated, which some analysts interpreted as a hopeful sign. “Despite the consumer's gloomy mood, spending is improving,” said Nigel Gault, chief U.S. economist for IHS Global Insight.

Two data releases on Tuesday will give new insights into growth and inflation in October. The Fed's industrial production data are forecast to show a continued expansion, while the producer price index is expected to show an uptick in wholesale prices, due mostly to higher energy costs.