The U.S. economy is on track to grow 3.5% this year as it sees only a "modest" impact from the eurozone debt crisis, Federal Reserve chairman Ben Bernanke said Wednesday.

"The economy... appears to be on track to continue to expand through this year and next," Bernanke said in testimony to Congress.

The Fed boss said the pace of recovery would likely quicken in 2011, driven by rising consumer spending, trade and investment.

"The incoming data suggest that gains in private final demand will sustain the recovery in economic activity," he told a House of Representatives panel.

"Consumer spending is likely to increase at a moderate pace going forward, supported by a gradual pickup in employment and income, greater consumer confidence, and some improvement in credit conditions."

U.S. consumers, long the drivers behind the world's largest economy, are spending around 3.5% more today than they were this time last year, Bernanke said.

He warned the still-moribund housing market continued to drag on the recovery, as home prices are pushed down by vast numbers of vacant houses and home builders struggle to get credit.

"Underlying housing activity appears to have firmed only a little since mid-2009," he said.

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