The United States will need faster growth if unemployment in the world’s largest economy is to continue to fall at the present rate, Ben Bernanke cautioned today.
The chairman of the Federal Reserve said that the decline in the US jobless rate over the past six months has been “somewhat out of sync” with the pace of economic growth over the same period.
“Further significant improvements in the unemployment rate will likely require a more rapid expansion of production and demand from consumers and businesses”, Bernanke said at a National Association for Business Economics conference in Arlington, Virginia.
He suggested that the sharp pickup in the jobs market was thanks to a decline in lay-offs, rather than a surge in hiring. He added, however, that “continued accommodative policies” can help boost growth, implying that the Federal Reserve is set to keep interest rates down for the foreseeable future.
The US unemployment rate fell to 8.3% in February, down from 9.1% last summer. The American economy grew at an annual rate of 3% in the final three months of 2011. In January, Bernanke said that the Fed expected to keep rates low until “late 2014”.
