March 26, 2012, 10:47 a.m. EDT
Berrnanke: Not clear if good jobs trends will last
Fed chief defends current policy as tonic for U.S. labor market
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — Federal Reserve Chairman Ben Bernanke on Monday said the improvement in the labor market might not be able to be sustained, in comments the market interpreted as an indication the central bank wasn’t willing to exit its ultra-easy monetary policy.
Improvement in the nation’s labor market since last fall may only be a reversal of large layoffs that hit during the recession, and further improvement may depend on faster economic growth, Bernanke said. “We cannot yet be sure that the recent pace of improvement in the labor market will be sustained,” said Bernanke in a speech to the National Association for Business Economics.
“There are a lot of things happening in the labor market we don’t fully understand,” he said. While the labor market may lead to a self-sustaining recovery, “we have not seen that in a persuasive way yet,” Bernanke added. “And I think it remains important for us to remain cautious and see how the economy develops,” he said.
Against this backdrop, the Fed’s current ultra-low interest rate policy can help, he said.
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“The important thing is Bernanke didn’t take QE3 off the table,” said Jay Bryson, global economist at Wells Fargo Securities, in an interview.
More: http://www.marketwatch.com/story/bernanke-not-clear-if-good-jobs-trends-will-last-2012-03-26
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