After a slew of wretched economic news, US Federal Reserve Chairman Ben Bernanke warned on Tuesday there had been a “loss of momentum” in the already tepid US jobs market.
Two years into a slow and largely jobless recovery, Bernanke predicted employment and growth would eventually pick up, but that a recent soft patch needed to be carefully monitored and that stimulative policies were still needed.
“Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established,” Bernanke told an audience in Atlanta, Georgia.
Reiterating a now all-too--familiar story of a recovery hobbled by a lack of new job opportunities and a continued housing crisis, he told the audience that “the jobs situation remains far from normal.”
Just 1.8 million of the 9 million jobs lost in the recession have been recovered, according to official figures, dampening everything from consumer spending to business investment.
On the back of a dismal employment figures for last month — which showed a meager 83,000 posts created by the private sector across the country — Bernanke expressed concern about the high number of long-term unemployed.
The Fed chairman also pointed to the moribund housing market, as evidence that the Fed’s stimulative policies needed to be maintained.
“The depressed state of housing in the United States is a big reason that the current recovery is less vigorous than we would like,” he said.
However, Bernanke gave no hints the Fed was ready to extend a controversial US$600 billion monetary stimulus package that is scheduled to end this month.
Instead, he said, “accomodative monetary policies are still needed,” apparently a reference to record-low interest rates.
Bernanke added that disruptions associated with the earthquake and tsunami in Japan continued to hamper growth this quarter, but he expected the impact to wane.