Bernanke says growth will pick up in second half of year

But the Fed chairman says the economy has been slowing down, which means that the central bank is likely to keep down interest rates (if it can). Speaking at an IMF meeting, he does see gradual improvement in the job market, although there's very little to be encouraged about. Key passage:

U.S. economic growth so far this year looks to have been somewhat slower than expected. Aggregate output increased at only 1.8 percent at an annual rate in the first quarter, and supply chain disruptions associated with the earthquake and tsunami in Japan are hampering economic activity this quarter. A number of indicators also suggest some loss of momentum in the labor market in recent weeks. We are, of course, monitoring these developments. That said, with the effects of the Japanese disaster on manufacturing output likely to dissipate in coming months, and with some moderation in gasoline prices in prospect, growth seems likely to pick up somewhat in the second half of the year. Overall, the economic recovery appears to be continuing at a moderate pace, albeit at a rate that is both uneven across sectors and frustratingly slow from the perspective of millions of unemployed and underemployed workers.

Wall Street is not thrilled. After being up by around 60 points for most of the session, the Dow has fallen below the line by a few points. The Dow closed down 19 points.