$20 bounce =Au ..Market rips, on hints of more QE, Bernanke: Not clear if good jobs trends will last
Fed chief defends current policy as tonic for U.S. labor market
03/26 08:19 AM
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WASHINGTON (MarketWatch) -- Improvement in the nation's labor market since last fall may only be a reversal of large layoffs that hit during the recession, and further improvement may depend on faster economic growth, Federal Reserve Chairman Ben Bernanke said Monday.
"We cannot yet be sure that the recent pace of improvement in the labor market will be sustained," said Bernanke in a speech to the National Association of Business Economics.
The top U.S. central banker said that weak demand is the primary factor behind the weak labor market, not structural issues like lack of employment skills in the workforce.
Against this backdrop, the Fed's current ultra-low interest rate policy can help, he said.
"What will lead to more hiring and, consequently, further declines in unemployment? The short answer is more-rapid economic growth," Bernanke said.
The unemployment rate has fallen to 8.3% in February, down from over 9% last fall. This has led some economists, and even Fed officials, to question whether the central bank should consider starting to exit from its easy monetary policy.
But Bernanke and his allies at the Fed have said they expect rates to stay near zero until late in 2014.
Bernanke said that the drop in the unemployment rate was good news but that it seemed somewhat out of sync with the overall pace of growth. |
