Growth in the U.S. remains too sluggish to cut the jobless rate quickly, leaving it a “long way” from satisfactory levels, according to former Federal Reserve Chairman Paul Volcker.
The unemployment rate may remain above 6 percent for at least another two years, Volcker said at a Brazilian-American Chamber of Commerce event in New York.
The economy “is growing, but not fast enough to reduce the unemployment rate in the way we would like to see,” Volcker said. “It’s declining because the labor force is not rising, and we’re getting a little more employment, but it’s a long way from being satisfactory.”
The U.S. unemployment rate dropped to 7.5 percent in April from 7.6 percent in March and 8.1 percent a year earlier. The rate was last below 6 percent in July 2008.
The Fed called the current jobless rate “elevated” in a May 1 statement. “Labor market conditions have shown some improvement in recent months, on balance, but the unemployment rate remains elevated,” the Fed said.
Volcker helped cut the unemployment rate to an eight-year low of 5.7 percent in 1987, his last year as Fed chairman, after reversing interest-rate increases that brought inflation down from as high as 15 percent.