Unemployment in the U.S. is likely to remain elevated for the next two of years, but over time the country will return to “full employment,” Federal Reserve Bank of Boston President and Chief Executive Eric Rosengren said Friday.
Rosengren’s comments came as the U.S. Labor Department reported that employers shed many more jobs than expected last month, boosting the unemployment rate and underscoring that joblessness remains a big issue even as the economy shows signs of life.
Rosengren said the “unemployment rate will remain elevated for far longer than I would like,” and for the next couple of years. But over time, he said, “I think the economy will get back to full employment.”
Rosengren discussed the matter while answering audience questions following an address to the Greater Boston Chamber of Commerce. He discussed unemployment as he responded to a question about the New England economy, which he said is in better shape than it was in prior recessions due to the health of local banks and the types of jobs in the region.
In his prepared remarks, Rosengren said the economy needs more time to heal before the Fed eases up on its accommodative monetary policy. The Fed needs to eventually ease its accommodative fiscal policy as well, he said later, but “first we have to get the economy in recovery mode and get us closer to full employment.”
He talked about the importance of returning to full employment without households becoming over-leveraged in the process. “The goal is not to get leverage back to where it was before,” he said. “The goal is to get the economy back.”
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