The pace of the U.S. economic recovery is expected to pick up moderately this year, Federal Reserve Chairman Ben Bernanke testified Friday before a Senate committee.
But at the same time, Mr. Bernanke told the Senate Budget Committee it could be four or five years before the nation’s job market returns to normal.
“The economic recovery that began a year and a half ago is continuing, although, to date, at a pace that has been insufficient to reduce the rate of unemployment significantly,” Mr. Bernanke said. “Persistently high unemployment, by damping household income and confidence, could threaten the strength and sustainability of the recovery.”
He said the Fed is predicting that the unemployment rate, which was 9.4% in December, will be close to 8% two years from now.
“With output growth likely to be moderate in the next few quarters and employers reportedly still reluctant to add to payrolls, considerable time likely will be required before the unemployment rate has returned to a more normal level,” Mr. Bernanke testified.
Mr. Bernanke did note there had been increased evidence of a “self-sustaining recovery” in consumer and business spending.