Bernanke Says U.S. Job Market Weak Despite Gains

Ben Bernanke job market weak gainsBy Martin Crutsinger


WASHINGTON -- Chairman Ben Bernanke says the U.S. job market remains weak despite three months of strong hiring and that the Federal Reserve's existing policies will help boost growth.

Further job gains will likely require more robust consumer and business demand, Bernanke said Monday during a speech at the National Association for Business Economics spring conference in Arlington, Va.

Bernanke's comments suggest the central bank is prepared to keep interest rates near zero for some time.

"Despite the recent improvement, the job market remains far from normal," Bernanke said. "The number of people working and total hours worked are still significantly below pre-crisis peaks."

Recent job gains have lifted hopes for the economy. Employers added an average of 245,000 jobs a month from December through February. The unemployment rate has fallen roughly a percentage point since summer, to 8.3 percent.

But the economy grew at an annual pace of just 3 percent in the October-December quarter. And economists believe growth has slowed in the January-March quarter to around 2 percent growth.

Bernanke said the combination of modest economic growth and rapid declines in unemployment is something of a puzzle. Normally, it takes growth of roughly 4 percent annual growth to lower the rate by that much over a year.

He offered some reasons for the unexpected decline in unemployment. Employers may be hiring rapidly because they cut too many jobs during the recession. He also said that government revisions may later show stronger growth over the past year.

But Bernanke cautioned that he doesn't expect the unemployment rate to keep falling at the current pace without much stronger economic growth. He also noted that the rate is still roughly 3 percentage points higher than its average over the 20 years preceding the recession.

His comments offer insight into the reasoning behind the Fed's plan to hold short-term interest rates near zero through 2014. The central bank has stuck with that timetable despite three months of strong job growth and other signs of economic improvement.

The Fed is concerned that the recovery could falter again as it did last year. Americans aren't seeing big pay increases, gas prices are rising, and Europe's debt crisis could weigh on the U.S. economy.

As long as inflation remains tame, analysts believe the Fed will likely hold interest rates down to give the economy more support.

Many economists believe that Fed officials will not make any changes in policy at their next meeting on April 25-26 and will only ease credit conditions if the economy slows further.

While the recent job market gains may continue, economists believe the record-low rates will continue as well, at least through much of this year.

One reason for that view: a pullback from the 2014 timetable could jolt investors and trigger a sudden rise in interest rates set by financial markets. That would slow the economy just as it is struggling to mount a sustainable recovery.



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Bernanke Warns US Job Market Weak Despite Gains

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PATRICE

What gains? Ben Unemployment isn't down. It's going up. Just because your fancy tinker bell math that doesn't include youth graduation into the work force, those that can't collect unemployment, those that have run out of unemployment insurance and a lot of fickle employers that don't want to hire someone that has been out of work for more then six months I have yet to see your math add up to reality. Then there is the underemployed and underpaid. All this adds to the deficet. Low tax revenues happen because of large unemployment. Your QE's add to the debt like a compounder with inflation. Dude your bandade quick fixes and no nothing political hench men and lobiest are killing America not helping it.

March 27 2012 at 9:59 PM Report abuse rate up rate down Reply
farkleberry71606

Employers may have added some jobs, but there were just as many huge layoffs. And for all their statistics, there are people who don't figure in their figures. Statistics are not facts, and never have been.

March 26 2012 at 10:08 PM Report abuse +1 rate up rate down Reply
Karine

Bernanke should be kicked out of his job .. He is a liar and sheister bar none!

March 26 2012 at 9:29 PM Report abuse +1 rate up rate down Reply
scottee

why can't we get The Fed audited? and why are interest rates at zero? is no one a saver? and is this okay with everyone? and why are we allowing The Fed to print and dilute our dollar???

March 26 2012 at 8:16 PM Report abuse +1 rate up rate down Reply
2 replies to scottee's comment
PATRICE

LOL no one has the set needed to ask for an audit and live.. and as for the interest rates being zero is because if you start adding interest to loans that will mean the U.S interest on their own loans with every Q.E so far 4 of them will compound inflation. It's like adding gas to a raging fire. Interest rated act as a mulitplyer to a debt. If he increases it the debt becomes very large very quickly and weakens the dollar which creates inflation. Once inflation reaches 5% its impossible to prevent it from doubling and tripling and squaring. So he holds the interest rates a 0% to keep inflation at 2.5-3.5 margins so investors won't be scared away from buying our debts and we can refinance it. If he increases the interest they will scare away debt investors and we would thus default and send the market into a tail spin and you would see Egypt, Greece and much of Europe here in America. We would not stand a snow balls chance at recovery for 20 years or more. But we would drag the rest of the world down with us and many of our trading partners would fair far far worse then we would because we have a multi level economy in trade and goods were as many only have one or two industires that would destroy those nations. Like China and Japan, Korea, Middle East and India, and Europe. We would fall but they would be our cushion. All beit a shattered one.

March 27 2012 at 10:10 PM Report abuse +1 rate up rate down Reply
PATRICE

Ben will go on printing money so long as the market shows a weakness and stands to fall. Creating more shocks that further erode employment opportunities and escalate the deficit in doing so. These prop ups are expensive yes but the consequences of not doing so is far more painful. It is like this.. The markets depend on buyers and sellers, and workers making money to do that buying that the sellers need. We don't have all the strings attached to the baloon here. Lots and lots of our jobs are now overseas. Creating a shinking work force that creates a shrinking tax base, that creates an expanding deficit, that creates a large debt. We aren't getting the jobs back which creates a weak market, weaker still buying power, and weakest retail turn out. In the absense of these things in solid terms he creates money to shore up what is lacking till it turns around. Which means that Market balloon the Economy is full of hot air. Like all baloons it looses heat and air escapes so he has to prime the pump to keep it up. We all sit in the basket with a few cut strings and a few big holes in the balloon. Eventually It will be so artificially saturated that it will become obvious to any investor that its unsustainable and they will not buy our loans. And we will default. In so doing us poor people in the basket will feel the free fall and the bone jarring lethal crash. Inflation, record joblessness and rampant poverty, another crashed market that will not get up if its not shut down.

March 27 2012 at 10:26 PM Report abuse +1 rate up rate down Reply
gjohnso627

Unemployment rates are down because millions have lost their unemployment insurance and are still without a job. there needs to be a better way of providing the true numbers and the correct reasons. millions are now without a lifeline that unemployment insurance gave and the jobs are not there. One other problem is that discrimination of age and race continue to determine who will work and who will not.

March 26 2012 at 7:42 PM Report abuse +2 rate up rate down Reply
larry

WoW ! My dog can count to 7 on his toy piano which makes him much smarter than Bernanke. This guy is an idiot and poor excuse for anyone involved with budget or jobs. Maybe he would make a better janitor. But he is definately not cut out for this job position.

March 26 2012 at 6:13 PM Report abuse +1 rate up rate down Reply
bjhmger

Bernanke is not a politician. He is growing on me and, as an honest man, gets it. Economy is not strong and it is fragile. Listen to him whether you are a Dem or Repub. He is a patriot.

March 26 2012 at 5:45 PM Report abuse +1 rate up rate down Reply
2 replies to bjhmger's comment
Mike

I agree

March 26 2012 at 10:49 PM Report abuse -1 rate up rate down Reply
proceedpermit

He is telling the truth. The job market is as weak as ever. The reports of economic recovery are allpolitical hype by supporters of the adminsitration looking for another undeserved turn. ANYONE can see that nobody is hiring. I don;t know ANYONE who has even gotten a good offer lately
The Obama recession continues.

March 26 2012 at 11:00 PM Report abuse -1 rate up rate down Reply

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