Fed's Bernanke: U.S. Labor Market Recovery Remains Murky

By Agence France-Presse The U.S. labor market remains weak even though the economy is regaining strength, with some improvement expected in the "next several quarters," Federal Reserve Board Governor Ben Bernanke said Oct. 14. Speaking to a Senate hearing on his renomination, Bernanke said that "the exact timing of the recovery in employment, however, is not completely clear." Bernanke echoed comments of other officials and economists about the so-called jobless recovery, which could trip up the U.S. economy. "Until the job market improves, this recovery will not feel like a recovery to most Americans," Bernanke said. The Fed governor said that corporate belt-tightening and the shifting of jobs overseas has kept employment down even while the country's economic output is growing. "I believe, however, that the current weakness of the labor market is more cyclical than structural in nature, implying that aggregate employment will recover and unemployment will decline as the economic expansion matures," he said. Bernanke said "modest encouragement" can be taken from recent data showing a slight gain in U.S. payrolls, but that other indicators, such as the number of hours worked and a "very slow decline" in new claims for unemployment insurance, are less encouraging. Copyright Agence France-Presse, 2003