Federal Reserve Chairman Ben S. Bernanke repeated that the job market is still far from healthy after signs of economic improvement over the past year, and he called on lawmakers to reduce the long-term budget deficit.
"We still have a long way to go before the labour market can be said to be operating normally," Bernanke said in testimony prepared for the Senate Budget Committee that is identical to remarks he gave on February 2 to the House Budget panel. "Particularly troubling is the unusually high level of long-term unemployment."
The jobless rate unexpectedly fell to 8.3 per cent in January, a government report showed on February 3. Bernanke's testimony yesterday indicated that his views on the health of the labour market haven't changed, even though he didn't refer to the January data. The economy added 243,000 jobs last month, according to the report, exceeding the most optimistic forecast in a Bloomberg News survey of economists.
While the jobless rate has dropped for five consecutive months, it remains above the 5.2 per cent to 6 per cent that Fed officials say is consistent with maximum employment.
The percentage of the unemployed who have remained without work for 27 weeks or more rose to 42.9 per cent in January from 42.5 per cent in December, the Labour Department said.
"Over the past two and a half years, the US economy has been gradually recovering from the recent deep recession," Bernanke, 58, said yesterday.
Private payrolls, which exclude government agencies, rose 257,000 in January after a revised gain of 220,000 the prior month, marking the biggest back-to-back gain since March-April. They were projected to climb by 160,000.
The unemployment rate, derived from a separate survey of households, was forecast to stay at 8.5 per cent, according to the median of a Bloomberg survey. The drop in the jobless rate reflected a 381,000 decrease in unemployment at the same time 250,000 Americans entered the labour force.