Sept. 29 (Bloomberg) -- Federal Reserve Bank of Atlanta President Dennis Lockhart said high U.S. unemployment may stem more from a slowdown in hiring than from an effort by employers to reduce payrolls.
“Persistent unemployment may be more attributable to a slowdown in the hiring rate than a rise in job destruction and job loss,” Lockhart said today in Atlanta, citing a research paper. “A hiring slowdown can be viewed as consistent with a structural problem, a mismatch problem.”
Chairman Ben S. Bernanke said yesterday the U.S. is facing a crisis with a jobless rate at or above 9 percent since April 2009. Fed officials are trying to determine how much unemployment results from long-term labor market challenges such as global competition or a difference between workers’ skills and employers’ needs.
The issue of high unemployment is “perplexing and vexing,” Lockhart said, adding that employment may not be entirely responsive to monetary policy.
“What are the limitations of policy, particularly monetary policy in dealing with the Fed’s employment mandate and actually contributing to a solution to this unemployment problem?” he said a conference on employment and education at the Atlanta Fed.
--Editors: James Tyson, Kevin Costelloe
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