NEW YORK (CNNMoney.com) - Federal Reserve Chairman Ben Bernanke said Tuesday he sees "tentative signs" that the economy's dramatic decline is easing, but that full recovery won't come until the financial system is stabilized.
"Recently we have seen tentative signs that the sharp decline in economic activity may be slowing," Bernanke told students and faculty of Morehouse College in Atlanta.
Bernanke said "a leveling out of economic activity is the first step toward recovery." But an economic recovery will not be sustainable "without a stabilization of our financial system and credit markets," he added.
Among the positive indicators Bernanke mentioned were recent upticks in home sales and new home construction. He also pointed to improvements in consumer spending, notably sales of new vehicles.