01-08-2011 09:11 BJT
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US Federal Reserve Chairman Ben Bernake will later make his way to Capitol Hill to appear before the Senate Budget Committee for its first meeting of the 112th Congress.
He says there is increasing evidence that a "self-sustaining" economic recovery is taking hold but the Fed's 600 billion US dollars Treasury bond-buying program is still needed because it will take years for unemployment to drop to more normal levels.
Federal Reserve Chairman Ben Bernanke says the U.S. economy may be finally hitting its stride, even though growth remains too weak to put a real dent in the nation's jobless rate.
Ben Bernanke, Federal Reserve Chairman, said, "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."
Bernanke's testimony before the Senate Banking Committee came just after the Labor Department that the nation's jobless rate dropped to 9.4 percent while adding 103,000 new jobs in December. Analysts say the drop in the unemployment rate was partly due to a troubling rise in the number of people exiting the workforce.
Ben Bernanke, Federal Reserve Chairman, said, "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. Persistently high unemployment, by damping household income and confidence, could threaten the strength and sustainability of the recovery."
Analysts say the economy will need to add more than 125,000 new jobs per month in order to improve the overall unemployment situation.
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