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Bernanke downplays jobs upturn

Tuesday, February 07, 2012 - 01:56

Feb. 7 - Federal Reserve Chairman Ben Bernanke sticks to the script when testifying before the Senate Finance Committee, despite signs of a strengthening economy, leading to further talk of a Federal Reserve that is behind the curve. Conway G. Gittens reports.

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Federal Reserve Chairman Ben Bernanke is sticking to his script when it comes to the U.S. economy, In testimony before the Senate Finance Committee - he made no mention of a recent pick-up in hiring or a drop in the unemployment rate to a near three-year low. He also did not update his figures to show the economy added on average 174,000 jobs per month last year, up from the 160,000 Bernanke mentioned in identical testimony to House lawmakers last week. Instead, he focused on the tough road ahead in the question and answer discussion with senators. SOUNDBITE: FEDERAL RESERVE CHAIRMAN BEN BERNANKE (ENGLISH) SAYING: "We are concerned that over the past few years that there has been some modest increase in the sustainable, long-run rate of unemployment. One of the factors contributing to that is the fact, that as I mentioned in my remarks - 40 percent of the unemployed have been unemployed for six months or more and those folks lose skills, they lose attachment to the labor force and its more difficult for them to find steady employment in the longer term." The omission of an economic upgrade in his testimony adds to recent criticism that the Federal Reserve is falling behind the economic curve. But Jim Awad, a managing director at Zephyr Asset Management says the Fed is right to be cautious. SOUNDBITE: JIM AWAD, MANAGING DIRECTOR, ZEPHYR ASSET MANAGEMENT (ENGLISH) SAYING: "There is a risk that they lock themselves in for too long, in terms of their forecast and the promise to keep rates low. There is a risk they may regret that. But based on current economic conditions, headwinds, and risk from Europe, I think they are spot on." Bernanke told lawmakers European imports are already starting to slow, and he's on the case - ready to act if the crisis threatens growth in the U.S. Conway Gittens, Reuters

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Bernanke downplays jobs upturn

Tuesday, February 07, 2012 - 01:56