Bernanke: “U.S. Unemployment Could Remain High for Years”

In an interview with ABC News, Federal Reserve Chairman Ben Bernanke says that it could take “a few more years” for U.S. unemployment to decline without a faster rate of growth than the U.S. economy is currently experiencing.

The chairman said he is sleeping better these days because the U.S. financial system looks stronger, and threats from Europe’s debt crisis look less worrisome.

Something millions of Americans can not say.

He also said the jump in gas prices will only be a moderate drag on growth.

Something else millions of Amercains can not say.

Despite his sleep filled nights, Bernanke said the economy isn’t strong enough to continue to reduce unemployment quickly. Unemployment has fallen from 9 percent in September to the current 8.3 percent. A healthy level is roughly between 5 percent and 6 percent, Bernanke noted.

“The recent news has been good, but I think we need to be cautious and make sure this is sustainable,” Bernanke said in the interview with ABC’s Diane Sawyer. “We haven’t quite yet got to the point where we can be completely confident that we’re on a track to full recovery.”

He said stronger growth would “guarantee that we keep making progress in the labor market.”

The Fed will likely stick to its plan to hold short-term interest rates at record lows through 2014.


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