The United States Federal Reserve chair Ben Bernanke said while the US economy was showing signs of a recovery, this was not yet sufficient to address lingering unemployment.
Addressing the Senate Budget Committee, Bernanke said it would take a number of years for the employment situation in the United States to reach “normal” levels. He said :” We have seen increased evidence that a self-sustaining recovery in consumer and business spending may be taking hold”. He added that the job market improvement had been “modest” at best.
Bernanke said that :” Persistently high unemployment, by damping household income and confidence, could threaten the strength and sustainability of the recovery”. He added that low inflation was also a key concern as :” Very low inflation increases the risk that new adverse shocks could push the economy into deflation”.
United States Labour Department figures showed that US unemployment dropped marginally in December to 9.4% from 9.8% the month before. The drop was the largest recorded in a single month in over 12 years. This is mitigated however by the statistic that 260,000 Americans were removed from the calculation after giving up on seeking employment.
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