Nov. 10 (Bloomberg) -- Chief executives at Bank of America Corp. and Capital One Financial Corp., two of the biggest consumer lenders, said the economic recovery is “fragile” and jobless people will struggle to find work.

“If we are seeing the beginning of a real sustainable recovery, it is still in its very early stages and it is still very fragile,” said Kenneth D. Lewis, Bank of America’s chief executive officer, at an investor conference in New York today. Banking has “some way to go” before the industry recovers, said Lewis, whose Charlotte, North Carolina-based company is the biggest U.S. bank by deposits and assets.

Weak home prices are contributing to the fragility and any recovery in labor markets may be slower and more prolonged than in past rebounds, Capital One CEO Richard Fairbank told the group. Kenneth Chenault, the CEO at New York-based American Express Co., said the recession “may be approaching an end.”

Banks trying to engineer a rebound in profit got a boost from data that show the U.S. gross domestic product grew 3.5 percent in the third quarter, its first gain in a year, and the Commerce Department said factory orders rose in September for the fifth time in six months. Still, the unemployment rate hit a 26-year high in October, and job losses typically herald more defaults on consumer and credit-card loans.

“The reduction in hours worked creates even more slack in the labor market than is apparent in the unemployment rate,” said Fairbank, whose company is based in McLean, Virginia. He added that the average time to find a job is at a record.

“Because this recession is so geographically broad, workers are less able to find new jobs by moving,” Fairbank said. “The housing crisis further reduces mobility as many workers cannot sell their current houses in order to relocate.”

Merrill Lynch

Lewis, 62, was giving one of his final public presentations as CEO. Lewis has said he’ll step down at the end of this year, following criticism from investors, regulators and lawmakers about his handling of the Merrill Lynch & Co. acquisition last year.

The July 2008 acquisition of Countrywide Financial Corp., the biggest U.S. home lender at the time, and the Jan. 1 takeover of Merrill Lynch, the biggest U.S. brokerage, made Bank of America “a much tougher competitor” and a more diverse, international operation, Lewis told analysts at the Grand Hyatt Hotel. The bank’s capital is “more than adequate,” he said.

CEOs must handle short-term issues while “steadfastly maintaining the long-term view,” Lewis said. “I believe my actions have been true.”

Disclosure Dispute

Lewis drew fire for not disclosing the extent of Merrill’s fourth-quarter losses and plans to pay bonuses of more than $3 billion before shareholders voted to approve the takeover in December. The loss ultimately reached $15.8 billion and triggered a second U.S. bailout of the bank, and helped prompt investigations by Congress, the Securities and Exchange Commission and New York Attorney General Andrew Cuomo.

U.S. regulators pressed the bank to overhaul its board of directors with more banking experience, and Lewis is stepping down before achieving his goal of repaying the $45 billion obtained from the Treasury Department’s Troubled Asset Relief Program.

To contact the reporter on this story: David Mildenberg in Charlotte at dmildenberg@bloomberg.net; Peter Eichenbaum in New York at peichenbaum@bloomberg.net

Last Updated: November 10, 2009 14:43 EST