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Bernanke Explains The Reality Of Economic Recovery

RNC Communications - March 26, 2012

Fed Chairman Ben Bernanke expressed concern that the job market is still weak, calling it “far from normal.”  

“The Fed Is Concerned That The Recovery Could Falter Again …” “The Fed is concerned that the recovery could falter again as it did last year. Americans aren't seeing big pay increases, gas prices are rising, and Europe's debt crisis could weigh on the U.S. economy.” (Martin Crutsigner, “Bernanke Says US Job Market Weak Despite Gains,” The Associated Press, 3/26/12)

  • Bernanke: “We Cannot Yet Be Sure That The Recent Pace Of Improvement In The Labor Market Will Be Sustained.” “Still, conditions remain far from normal, as shown, for example, by the high level of long-term unemployment and the fact that jobs and hours worked remain well below pre-crisis peaks, even without adjusting for growth in the labor force.  Moreover, we cannot yet be sure that the recent pace of improvement in the labor market will be sustained.” (Ben Bernanke, Prepared Remarks For Delivery Before The National Association For Business Economics Annual Conference, Washington, D.C., 3/26/12)

Fed Chairman Ben Bernanke: “The Job Market Remains Far From Normal” And “The Number Of People Working And Total Hours Worked Are Still Significantly Below Pre-Crisis Peaks.” “Importantly, despite the recent improvement, the job market remains far from normal; for example, the number of people working and total hours worked are still significantly below pre-crisis peaks, while the unemployment rate remains well above what most economists judge to be its long-run sustainable level.  Of particular concern is the large number of people who have been unemployed for more than six months.” (Ben Bernanke, Prepared Remarks For Delivery Before The National Association For Business Economics Annual Conference, Washington, D.C., 3/26/12)

  • Bernanke: “A Significant Portion Of The Improvement In The Labor Market Has Reflected A Decline In Layoffs Rather Than An Increase In Hiring.” “After nearly two years of job gains, private payroll employment remains more than 5 million jobs below its previous peak; the jobs shortfall is even larger, of course, when increases in the size of the labor force are taken into account.  And the unemployment rate in February was still roughly 3 percentage points above its average over the 20 years preceding the recession.  Moreover, a significant portion of the improvement in the labor market has reflected a decline in layoffs rather than an increase in hiring.” (Ben Bernanke, Prepared Remarks For Delivery Before The National Association For Business Economics Annual Conference, Washington, D.C., 3/26/12)
  • The Unemployment Rate Remains 3 Percentage Points Higher Than The Average Rate. “But Bernanke cautioned that he doesn't expect unemployment to keep falling at the current pace without much stronger economic growth. He also noted that the rate is still roughly 3 percentage points higher than its average over the 20 years preceding the recession.” (Martin Crutsigner, “Bernanke Says US Job Market Weak Despite Gains,” The Associated Press, 3/26/12)

Bernanke: Biggest Concern Is “That The Long-Term Unemployed Will See Their Skills Atrophy And Give Up On The Job Market Altogether.” “The Fed Chairman also spoke of one of his biggest concerns-- that the long-term unemployed will see their skills atrophy and give up on the job market altogether. That could create a longer lasting problem for the economy. ‘Unemployment -- especially long-term unemployment -- imposes important economic costs on everyone, not just the unemployed themselves,’ Bernanke said, pointing to lost tax revenue for the government, increasing costs of unemployment benefits and a less productive economy overall.” (Annalyn Censky, “Bernanke: Job Gains Present Economic ‘Puzzle’,” CNN Money, 3/26/12)

  • Bernanke: Levels Of Long-Term Unemployment Remain “Far Outside The Range Of Experience Since World War II.” “Although most spells of unemployment are disruptive or costly, the persistently high rate of long-term unemployment we have seen over the past three years or so is especially concerning.  In this episode, both the median and average durations of unemployment have reached levels far outside the range of experience since World War II.  And the share of unemployment that represents spells lasting more than six months has been higher than 40 percent since December 2009.  By way of comparison, the share of unemployment that was long term in nature never exceeded 25 percent or so in the severe 1981-82 recession.”  (Ben Bernanke, Prepared Remarks For Delivery Before The National Association For Business Economics Annual Conference, Washington, D.C., 3/26/12)
  • 5,426,000 Americans Have Been Unemployed 27 Weeks Or Longer And 3,924,000 Americans Have Been Unemployed 52 Weeks Or Longer. (BLS, Accessed 3/26/12)

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