Federal Reserve Chairman Ben S. Bernanke said gauges of the U.S. economy’s strength may fail to measure the suffering of individual citizens.
“Even though some key aggregate metrics -- including consumer spending, disposable income, household net worth, and debt service payments -- have moved in the direction of recovery, it is clear that many individuals and households continue to struggle with difficult economic and financial conditions,” Bernanke said today in remarks prepared for a conference in Cambridge, Massachusetts.
The Federal Open Market Committee said on Aug. 1 it will pump fresh stimulus if necessary into the weakening economic expansion to boost growth and reduce an unemployment rate that’s been stuck at 8 percent or higher for more than three years.
Bernanke didn’t address the outlook for monetary policy or the economy, or expand on the Fed’s Aug. 1 statement. His remarks, focused on economic measurement, will be delivered via prerecorded video.
The 58-year-old Fed chief, a former Princeton professor, said economists should “increase the attention paid to microeconomic data, which better capture the diversity of experience across households and firms.” Also, researchers should “seek better and more-direct measurements of economic well-being, the ultimate objective of our policy decisions.”
He said interesting projects include the Organization for Economic Co-operation and Development’s Better Life Initiative, which aims at measuring quality of life in different countries, and the Gross National Happiness index compiled by Bhutan.
Such gauges “incorporate elements such as psychological wellness, the level of education, physical health and safety, community vitality and the strength of family and social ties, and time spent in leisure activities,” he said.