TOPWRAP-Bernanke: recession likely over; data shows recovery

* Bernanke says U.S. recession likely over

* U.S. retail data lifts stocks, pressures bonds

* Banks of England and Canada say recovery to be slow

NEW YORK, Sept 15 - Federal Reserve Chairman Ben Bernanke said on Tuesday the recession was technically over, while data including on U.S. retail sales bolstered hopes that recovery from the worst downturn in decades was progressing.

But Bernanke said the recovery would be slow and it would take time to create jobs. Similar warnings came from the Bank of England, whose governor also said the bank could cut the interest rate it pays on commercial banks' deposits, and from the Bank of Canada.

The U.S. Commerce Department said retail sales climbed 2.7 percent in August after declining 0.2 percent in July. It was the biggest monthly advance since January 2006 and well above expectations on Wall Street for a 2 percent increase.

"Retail sales show the recovery is here. This wasn't just autos, it wasn't just gasoline. This was the U.S. consumer getting out of their foxhole," said T.J. Marta, market strategist at Marta on the Markets in Scotch Plains, New Jersey. "This is indisputably a good number."

Readings on manufacturing in the New York region and on national producer prices also came in stronger than expected.

U.S. stocks rose after the retail data, while U.S. Treasuries prices fell, pulling benchmark yields back from two-month lows.

The benchmark Standard & Poor's 500 index is up about 55 percent since hitting 12-year lows in early March, but investors have been anxious to see more definitive signs that the economy is getting better.

The Organization of Petroleum Exporting Countries, which left its world oil demand forecast for 2010 unchanged, also said a recovery will be slow and gradual, even though evidence shows the world economy should be improving.

In Germany, the ZEW survey showed a smaller-than-expected improvement in the country's investor morale.

The ZEW's expectations index for Germany rose to 57.7 from 56.1 in August, reaching its highest since April 2006, although economists had expected a bigger rise.

In the United States, President Barack Obama told autoworkers the U.S. economy was on the mend.

The rising unemployment rate has remained a top worry and autoworkers have been among the hardest hit by layoffs.

Bernanke, after addressing a Brookings Institution conference, cautioned: "Even though from a technical perspective the recession is very likely over at this point, it's still going to feel like a very weak economy for some time."

The Bank of Canada's deputy governor, meanwhile, said a smooth economic recovery in Canada is not yet assured and that the strength of the Canadian dollar is one factor that could derail a comeback.