A day after euphoria over the Dow crossing the 13,000 mark, Federal Reserve Chairman Ben Bernanke tossed cold water on Wall Street’s celebration.
Bernanke, in testimony before Congress yesterday, said a string of upbeat economic reports isn’t enough to heal the nation’s underlying unemployment woes.
“The job market remains far from normal,” Bernanke said in his semiannual report to lawmakers. “The unemployment rate remains elevated, long-term unemployment is still near record levels, and the number of persons working part time for economic reasons is very high.”
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Ben Bernanke
Despite good news on the job front with the unemployment rate falling, Bernanke warned that “continued improvement in the job market is likely to require stronger growth in final demand and production.”
Bernanke also said he’s concerned that high unemployment could become a new normal instead of a cyclical quirk as in past years.
Bernanke also failed to impress investors when he offered little hope of additional stimulus in the government’s bond-buying sprees, a practice known as “quantitative easing.”
“If the markets were expecting some assurance of additional accommodation from Bernanke, they were disappointed,” said economist Dana Saporta of Credit Suisse.
The Fed has kept interest rates near zero since December 2008, and also expanded its balance sheet by buying more than $2.3 trillion in bonds and other securities.
The economy did grow at a faster rate at the end of 2011. The nation’s gross domestic product economy grew at 3 percent rate in the fourth quarter, up from a previous estimate of 2.8 percent.
tharp@nypost.com
Federal Reserve Chairman Ben Bernanke, unemployment rate, unemployment, Bernanke, Dana Saporta
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