No quick fix to US jobs crisis
UNEMPLOYMENT in the US remains elevated and is some way from a significant improvement, the head of the Federal Reserve said yesterday.
Despite positive recent jobs data, Ben Bernanke warned: “Given the anticipated modest pace of economic recovery, the committee expects that over coming quarters the unemployment rate will decline only gradually”.
The official unemployment rate will remain above eight per cent towards the end of the year, according to projections cited by the Fed chairman.
Bernanke added that many more jobless Americans have given up on finding work, and are not even included in the figures. The level of structural unemployment is likely to have edged upwards, he said.
The Fed chief showed no sign of backing down from the ultra accommodative policies pledged by the central bank.
Bernanke also advised Congress to extend the tax breaks originally brought in by former President George W. Bush, which are due to expire at the end of the year.
Yet separate data released yesterday appeared to show some upturn for the US economy. Consumer credit expanded much more than expected in December, growing by $19.3bn (£12bn).