Unemployment the most pressing challenge says Bernanke | WPN World People News

Federal Reserve chairman Ben Bernanke has vowed to advance the jobs market if US unemployment worsens.

Bernanke, speaking to House members yesterday, said he thought unemployment was the most pressing challenge for the US economy amidst the slow financial recovery.

He said the tepid recovery in employment could force him to act on the unemployment rate if the economy does not continue to improve.

Bernanke told a House of Representatives committee the Fed had not seen the kind of improvements in the labour market that it had been hoping for.

His comments came hours after the Labor Department had reported 464,000 Americans began claiming unemployment benefits last week, which was an eight-plus per cent rise over the week before.

He said: "Unemployment is the most important problem we have right now. It is incredibly important that we get the unemployment rate down and get people back to work. It's important not just for their sake, but for the future of our economy.”

The central bank chief said the Fed would continue to help stimulate growth by buying new assets and lowering interest rates on bank deposits held by the central bank.

Underlining the impact of long-term unemployment on sustainable growth, he warned that people are out of work for a long time would lose skills and become less connected to the labour markets.

Congress on Thursday approved an extension of unemployment benefits for the long-term unemployed.

Source: Europe News.Net