The U.S. unemployment rate has declined faster than the Federal Reserve has predicted, but the jobs market remains far from normal, the nation's top central banker said Monday. "We have seen some positive signs on the jobs front recently, including a pickup in monthly payroll gains and a notable decline in the unemployment rate," Federal Reserve Chairman Ben Bernanke told the National Association for Business Economics Annual Conference in Washington, DC.
The unemployment rate held in February at a three-year low of 8.3 percent.
However, because recent hiring may be attributed to a reversal of the unusually large layoffs that occurred during late 2008 and over 2009, further improvement will depend on economic growth.
"We cannot yet be sure that the recent pace of improvement in the labor market will be sustained," he cautioned. "The number of people working and total hours worked are still significantly below pre-crisis peaks, while the unemployment rate remains well above what most economists judge to be its long-run sustainable level. Cyclical problems could turn into structural weakness in the U.S. jobs market without a more robust recovery, Bernanke noted warning of the negative implications of long-term unemployment. But he assured that that the Fed's zero-interest rate policy and other support measures, including the so-called Operation Twist program, will help reduce unemployment over time by promoting economic growth.