Bernanke Tells ABC American Economy Still Not on a Path to Recovery
Ben Bernanke, the Federal Reserve Chairperson, stated during a televised interview with ABC News on Tuesday, that although the financial system appeared stronger and more stable, the United States economy was still not on a certain path to full recovery.
He gave a caution regarding the flat condition of the housing market and expressed concerns relating to long term unemployment, with the jobless rate at a current 8.3 percent, which is too high. A positive indication was that new jobs have been created and indications are that consumer and business sentiment are more positive, as is the state of the fragile European economy.
Mr Bernanke also expressed concern regarding the recent increase in the prices of oil and gasoline and that this posed a “major problem” and created a “moderate risk” to the economy. He said that inflation could increase by reason of the higher gasoline price during the next few months and could affect consumer spending.
In answer to a question regarding whether the Central bank had plans to boost the economy with a third round of bond-buying, Mr. Bernanke stated that the Federal was ready to respond to “however the economy evolves”. He appreciated there was hardship for many Americans and the frustration of receiving a small raise in earnings, only to have it taken by the increased costs of commuting.
The comments made by Ben Bernanke on Tuesday, expanded the cautionary remarks made by him in a speech on Monday, regarding the jobs market. He had then focused on the long-term unemployment situation and confirmed the Central bank needed to maintain low interest rates for a significant time to come. This was designed to con front the substantial problems related to the labor market. He included in his speech on Tuesday, that the unemployment rate would not attain a normal level for a few years into the future.