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On January 3, 2014, Ben Bernanke gave what many have referred to as his final speech as the Chairman of the US Federal Reserve at the annual American Economic Association meeting.
The outgoing Chairman, whose term ends on 31st January focused on the accomplishments of the past eight years and looked at several areas of the economy, including the non-farm payrolls.
The speech covered three main areas, the Federal Reserve’s commitment to transparency and accountability, financial stability and financial reform and lastly monetary policy. He closed his speech by discussing the prospects of the US economy and the global economy in general.
He discussed the US economic recovery and its prospects observing that there had been significant improvement in economy since the beginning of the recovery, which officially started over four years ago.
He looked at areas like non-farm payroll employment, which has improved, going down from 10% to 7%. Industry equipment investment and production have exceeded the pre-recession peaks and the banking system has also been recapitalised, making the financial system safer.
‘The combination of financial healing, greater balance in the housing market, less fiscal restraint, and, of course, continued monetary policy accommodation bodes well for US economic growth in coming quarters,’ said Bernanke.
He said he was optimistic about the future but insisted that the economic recovery was still incomplete. ‘Despite this progress, the recovery clearly remains incomplete. At 7%, the unemployment rate is still elevated.’
The much-anticipated US unemployment figures–the non-farm payrolls–are due out on Friday January 10.
As reported by the US Bureau of Labor Statistics, non-farm payroll employment added 203,000 more jobs in November, a slightly higher number than the 200,000 new jobs created in October.
According to forecasts from analysts polled by Reuters, 193,000 new jobs are expected on the non-farm payrolls for December.
If the unemployment figures on Friday are much weaker than this there might be a gut reaction in the financial markets
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