Federal Reserve Chairman Ben Bernanke has warned that the country’s unemployment situation “remains a grave concern” as the hiring process in the job market stays sluggish.
“Fewer than half of the eight million jobs lost in the recession have been restored and at 8.1 percent, the unemployment rate is nearly unchanged since the beginning of the year and is well above normal levels,” Bernanke told reporters on Thursday, AFP reported.
“The weak job market should concern every American. High unemployment imposes hardship on millions of people and it entails a tremendous waste of human skills and talents,” the official added.
Bernanke also pointed out that the Federal Reserve does not have the means to offset the economic shock from the public spending cuts and tax hikes, scheduled for the end of 2012.
“If the fiscal cliff isn’t addressed, as I’ve said, I don’t think our tools are strong enough to offset the effects of a major fiscal shock, so we’d have to think about what to do in that contingency,” he said.
“I think it’s really important for the fiscal policymakers to work together and try to find a solution for that,” he added
Bernanke made the remarks after the Federal Reserve revised down its economic growth projection for 2012 to 1.7 to two percent, compared to its expectations in June of growth between 1.9 and 2.3 percent.
Meanwhile, the US Labor Department announced that applications for weekly benefits rose by 15,000 to a seasonally-adjusted 382,000 for the week, which ended on September 8, the highest level since mid-July.
Nearly six million Americans are currently receiving jobless benefits. But the actual figure would have been much higher if state authorities had not stopped extending benefit programs.
The figures come after a disappointing jobs report last week, indicating that employers added only 96,000 jobs in August, compared to July’s gain of 141,000 and the average 226,000 a month, added in the January-March quarter.
The US economy is still struggling, three years after the recession, which officially ended in June 2009. It grew at a tepid 1.7 percent annual rate in the second quarter of 2012.