The sluggish recovery has slowed and will not be enough to drive the unemployment rate below 8% until 2012, Federal Reserve Bank of Chicago president Charles Evans said Tuesday.
The 1.7% gross domestic product growth rate in the second quarter was less than half the rate of the first quarter.
“This is a quite moderate pace of growth, given the severity of the recession we experienced and in comparison with the economy’s potential growth rate,” Evans said. “We need stronger growth for some time before we return to a more normal level of economic activity.”
Evans said monetary policy will only be helpful if jobless woes are not caused by structural changes in labor demand.
