WASHINGTON— Federal Reserve Board chairman Ben Bernanke Friday reemphasized his concern about high unemployment and home foreclosures, while making no mention of inflation, in a speech on “community development.”
Two days after holding a press conference following a meeting of the Federal Open Market Committee, Bernanke did not talk about monetary policy per se, but the thrust of his remarks reinforced his Wednesday message that the Fed needs to keep monetary policy “highly accommodative” for the indefinite future.
Bernanke had not been expected to say much about the economy or policy in a speech to the Fed’s Community Affairs Research Conference across the Potomac River from central bank’s headquarters in Arlington, Va.
However, the Fed chairman took the opportunity to talk again about his leading economic worries, relating them to the problems of lower-income people and communities.
“The broader economy is in a moderate recovery, and we have recently seen some welcome, if gradual, improvement in the labor market,” he said in remarks to the conference. “But our economy is far from where we would like it to be, and many people and neighborhoods are in danger of being left behind.”
In a similar vein earlier in his speech, Bernanke said “the economy is recovering at a moderate pace” and noted that “the labor market has been gradually improving and the unemployment rate has declined somewhat.”
“But unemployment remains quite high, particularly among minorities, the young, and those with less education,” he added. “What’s more, long-term unemployment remains at historically high levels. Nearly half of the unemployed have been out of work for six months or more.”
What’s more, Bernanke observed that “the housing market is also holding back the recovery.”
“The foreclosure rate remains very high, and many homeowners who have avoided foreclosure find themselves 'under water,’ meaning their mortgage debt exceeds the value of their homes,” he said.
“Obviously, the problems in the labor market and the housing market are not unrelated,” the Fed chief added. “In particular, lost income from unemployment is causing many families to fall behind on their mortgage payments.”
Conspicuously absent from Bernanke’s text was any mention of rising gasoline, food and other prices, even though those presumably affect lower income households more than most.