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Yellen: US economy still needs help on 'slack' jobs, 'disappointing' housing activity

Yellen: US economy still needs help on 'slack' jobs, 'disappointing' housing activity
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There was a mixed assessment from the head of the US central bank, Janet Yellen, on Wednesday as she said the country’s economy still needed lots of support because of “considerable slack” in the jobs market.

Yellen expressed concerns about the high rate of long-term unemployment and a slow rise in worker’s pay.

She told a congressional committee that that situation warranted more stimulus even as the economy grows: “I expect that economic activity will expand at a somewhat faster pace this year than it did last year.”

Yellen also flagged up geopolitical issues, meaning Ukraine: “One prominent risk is that adverse developments abroad, such as heightened geopolitical tensions or an intensification of financial stresses in emerging market economies, could undermine confidence in the global economic recovery.”

The Federal Reserve Chair also noted “disappointing” housing activity, calling that another main risk to the Fed’s generally positive outlook.

“The recent flattening out in housing activity could prove more protracted than currently expected rather than resuming its earlier pace of recovery,” she said.

Commenting on remarks to the Congressional Joint Economic Committee, David Keeble, global head of interest rates strategy at Credit Agricole Corporate & Investment Bank in New York said. “The only new thing in it is housing. All the other comments could have been lifted from her recent speeches.”

with Reuters