Jobless recovery predicted by Bernake

No new jobs for awhile, he is reported to be prepared to tell Congress. Some in Congress are hopping mad – they passed a law saying this couldn’t happen, Goddammit!

The Federal Reserve chairman, delivering semiannual testimony required in legislation written by the late lawmakers, will describe a U.S. economy returning to growth next year without generating many new jobs. Even with credit markets thawing, Fed officials see unemployment persisting at 8 percent or higher through the final three months of 2010.

A recovery with slow job growth would keep pressure on the Fed to hold interest rates around zero and to continue or expand billions of dollars in lending programs and asset purchases. It would also mark a failure to fulfill the mandate of the Humphrey-Hawkins Full Employment and Balanced Growth Act, signed into law by President Jimmy Carter on Oct. 27, 1978, that the central bank achieve both maximum employment and stable prices.

“We’ve got a lot to talk about,” says Representative Maxine Waters.

2 Comments

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2 responses to “Jobless recovery predicted by Bernake

  1. CEA

    Coming out of a recession, companies typically don’t hire until they are fairly certain the bad times are over. Small companies in particular (and they are the bulk of the U.S. economy) tend to make do until they are convinced.

    (There are 6 million firms with employees in the U.S.. 4.5 million of them have 19 employees or fewer).

    So, Maxine Waters can rant all she wants, and she will, but history says that once you are in a recesssion, even when the economy stops contracting and starts growing, employment is a lagging indicator.

    CEA

  2. Retired IB'er

    CEA,

    “Coming out of a recession…”

    My, you have such a positive outlook for a Monday, with the Dow still marching south.

    You must have had an extraordinarily nice weekend to be able to even contemplate the light at the end of this long tunnel!