Federal Reserve Chairman Ben Bernanke speaks during a news conference in Washington, Thursday, Sept. 13, 2012, following the Federal Open Market Committee meeting to present the FOMC's current economic projections and to provide additional context for the FOMC's policy decision. (AP Photo/Manuel Balce Ceneta)
(CNSNews.com) – Federal Reserve Chairman Ben Bernanke said the jobs market was so weak it required an open-ended bailout commitment from the Federal Reserve, until the Fed sees “ongoing, sustained” improvement.
“The idea is to provide enough support so the economy will grow fast enough to bring unemployment down over time,” said Bernanke at a Thursday press conference.
“As we look back at the last six months or so we see unemployment is in basically the same place it was in January,” he said. “We’ve seen not enough jobs growth to bring down the unemployment rate and what we need to see is more progress.”
Bernanke said the recently announced round of quantitative easing needed to be open-ended because the economy was not creating enough jobs, noting that the labor market needed “more momentum” and that the past six months of jobs growth “isn’t it.”
“We’re looking for ongoing, sustained improvement in the labor market,” he said. “There’s not a specific number that we have in mind but what we’ve seen the last six months isn’t it.”
“We’re looking for something that involves unemployment coming down in a sustained way – not necessarily a rapid way because I don’t know if our tools are that strong – but we’d like to see an economy which is strong enough that it will support improving labor market conditions and unemployment that’s declining gradually over time, that’s essentially what we’re looking for,” Bernanke said.
The Fed announced on Thursday that it would provide $40 billion per month in easing until it saw marked improvement in both the economy and the jobs market, giving no timeframe for when the stimulus might end.
In its updated economic forecasts, the Fed projected a slightly better employment situation through 2014, saying the unemployment rate could be anywhere between 6.7 and 7.3 percent, which is better that its June forecast of between 7.0 to 7.7 percent unemployment.
By pumping billions of dollars into the economy Bernanke hopes to stimulate demand for goods and services and thus speed job creation, effectively providing a bailout for the entire economy – a bailout that the Fed said would continue until the economy begins to fully recover.