WASHINGTON - October 4, 2011 - Federal Reserve Chairman Ben Bernanke says that hopes of an economic recovery are faltering and the central bank is prepared to take further steps to support it.

The economy is growing more slowly than the Federal Reserve expected, Bernanke said Tuesday before the congressional Joint Economic Committee. He said the biggest factor depressing consumer confidence is poor job growth.

Stocks came off morning lows after Bernanke implied that the Fed could adopt additional stimulus measures in the coming months. The Dow Jones industrial average had fallen more than 200 points but recovered most of those losses to end up down only 64 points at midday.

Bernanke offered his grim assessment after the economy barely grew in the first half of the year and created no net jobs in August. Consumer confidence fell this summer to the lowest point since the Depression started. Europe's debt crisis has also intensified.

After their September meeting, Fed policymakers warned of significant downside risks to the economic outlook. As a result, the Fed voted to shift $400 billion of its investment portfolio from short- to longer-term Treasuries to try to drive down long-term rates.

In August, the Fed said it planned to keep short-term interest rates at record lows until at least mid-2013, assuming the economy remained weak.

Both decisions drew three dissenting votes on the Fed's policy committee. The three dissents, all from regional Fed bank presidents, were the most dissents in nearly 20 years.

Republican leaders in Congress also cautioned Bernanke and the Fed against taking action to lower interest rates. GOP lawmakers and Bernanke have clashed in recent months over how best to invigorate the economy.