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Thursday, 9 February 2012

Unemployment worse than stated - Bernanke

The US Federal Reserve chairman Ben Bernanke said the 8.3% US unemployment rate understates weakness in the labour market.  "We still have a long way to go
before the labour market can be said to be operating normally", he said.  The unemployment figure excludes those unemployed not seeking work.  Many are unable to actively look for work or have given up looking, so those unemployed are not counted. 

Bernanke's statements distance himself from the government, and their positive spin about improving employment.  The growing divergence between the Federal Reserve and the Federal government, following earlier criticisms by the Federal Reserve, is significant because it reveals growing disagreement at the highest administrative levels about the nature of the underlying financial problems.  Without clear agreement on the problem, any solution would be unlikely to succeed.

After Greece is ":resolved", international market focus will probably return to the USA.

See Bloomberg's article "Bernanke says 8.3% unemployment understates weakness in US labor market", which I acknowledge.

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