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Bernanke: US Needs Faster Growth – QE3?

From an unquestioning Reuters:

Bernanke says U.S. needs faster growth

By Pedro da Costa and Jason Lange
March 26, 2012

WASHINGTON (Reuters) – The U.S. economy needs to grow more quickly if it is to produce enough jobs to bring down the unemployment rate, Federal Reserve Chairman Ben Bernanke said on Monday, tamping down expectations of a quick reversal of monetary easing.

Or rather, ramping up expectations of ‘Quantitative Easing Three.’

Bernanke said the recent decline in the jobless rate, which dropped to 8.3 percent in February from 9.1 percent last summer, was "somewhat out of sync" with the rather modest pace of economic growth.

U.S. gross domestic product grew 3 percent in the fourth quarter, but is expected to have slowed to just below 2 percent in the first three months of this year. For all of last year, it grew only 1.7 percent, which would normally be too slow to move the unemployment rate lower.

Bernanke said the recent drop in the jobless rate could reflect an effort by businesses to recalibrate their payrolls after unusually heavy job cuts during the recession. If this is the case, he said, progress may stall.

In other words, Bernanke doesn’t believe the administration’s rosy jobs numbers either.

"To the extent that this reversal has been complete, further significant improvements in the unemployment rate will likely require a more rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies," Bernanke told the National Association for Business Economics.

U.S. stock index futures extended their gains and government debt prices trimmed their losses after Bernanke’s comments…

QE3 is bound to happen. It’s only a question of how close to the elections they think they have to do it.

This article was posted by Steve on Monday, March 26th, 2012. Comments are currently closed.

2 Responses to “Bernanke: US Needs Faster Growth – QE3?”

  1. GetBackJack says:

    I used to think Bernanke was just a tool. Now I know he’s not even human.

  2. P. Aaron says:

    This admin’s well past the an awful Carter, Hoover’s record is now ind danger.

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