28 Jul 2009

US unemployment rate predicted to stay high

7:33 am on 28 July 2009

US Federal Reserve chairman Ben Bernanke has cautioned that unemployment is likely to remain high even when the United States emerges from recession some time in the next few months.

Mr Bernanke expects the US economy to improve but the estimated expansion of will not be enough to bring down the jobless rate.

Taping a television program that will air on PBS this week, the top monetary policymaker defended the aggressive actions taken by the Fed during the deep financial crisis.

"The Federal Reserve has been putting the pedal to the metal," he said. But he added that it takes GDP growth of about 2.5% to keep the jobless rate constant.

The Federal Reserve's current outlook does not call for growth to reach that level in the latter part of 2009.

Latest government data shows the U.S. unemployment rate at 9.5%, the highest since 1983.

In the housing market, Mr Bernanke says he expects 2.8 million Americans will lose their houses this year.