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Updated Wednesday, November 18, 2009 11:07 am TWN, By Neil Irwin and Ylan Q. Mui, The Washington Post

Bernanke offers sobering outlook on jobs

Bernanke emphasized the human toll of the continued weak job market, noting the astronomical unemployment rates among some subsets of the labor force, such as the 19 percent jobless rate among 16-to-24-year-olds. This widespread unemployment among young adults could have long-lasting implications, he said, as they lose out on work experience and on-the-job training.

In addressing the dollar, Bernanke said the recent decline is partly due to investors who had poured money into the safety of U.S. currency during the depths of the financial crisis and are now more comfortable investing elsewhere. The dollar is down 16 percent against a basket of other major currencies since March 5. That decline has helped make U.S. exports more competitive but has raised fears that what has been an orderly decline could become a rout.

“We are attentive to the implications of changes in the value of the dollar and will continue to formulate policy to guard against risks to our dual mandate to foster both maximum employment and price stability,” Bernanke said. He said that Fed policy will help ensure that the dollar is strong and a “source of global financial stability.” Also Monday, in a sign that the economic expansion is continuing this fall, the Commerce Department reported that retail sales in October grew 1.4 percent compared with the previous month, driven by a jump in auto sales.

Car sales had spiked over the summer because of the government's popular “cash for clunkers” program, which gave consumers with certain trade-ins a credit of up to US$4,500 toward the purchase of a new, fuel-efficient vehicle. But sales slumped in September after the stimulus ended. Analysts said sales were returning to normal in October.

General merchandise and department stores also got a lift last month, rising 0.8 percent. Restaurants had a 1.2 percent rise, while health-care stores' sales were up 0.5 percent. But several long-suffering categories continued to experience sales declines. Electronics stores fell 0.6 percent, furniture retailers were down 0.8 percent, and building materials dropped 2.4 percent.

Still, the overall increase was higher than anticipated, which some analysts interpreted as a hopeful sign. “Despite the consumer's gloomy mood, spending is improving,” said Nigel Gault, chief U.S. economist for IHS Global Insight.

Two data releases on Tuesday will give new insights into growth and inflation in October. The Fed's industrial production data are forecast to show a continued expansion, while the producer price index is expected to show an uptick in wholesale prices, due mostly to higher energy costs.

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	Ben S. Bernanke, chairman of the U.S. Federal Reserve, speaks during an Economic Club of New York luncheon in New York, U.S., on Monday, Nov. 16. Bernanke has succeeded in returning the U.S. economy to growth after the longest contraction in more than six decades. So far, Wall Street, not Main Street, has been the main beneficiary. (Bloomberg) Enlarge Photo


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