Economy

The Federal Reserve chairman said that the economy should grow through 2011 but that the jobless rate would come down slowly.

Sen. Chuck Grassley (R-Iowa) has asked the Department of Labor to account for how stimulus dollars have been spent on clean-energy jobs when it appears there is no clear definition for this type of work.

"[It] has come to my attention that the DOL is just now attempting to define what a 'green job' is," Grassley wrote in June 2 letter to Labor Secretary Hilda Solis. "Interestingly, this comes more than a year after the [stimulus bill] was signed into law and after millions of dollars in funding have already been distributed for green jobs."

Grassley opposed the legislation because he thought it was too expensive. The 2009 bill provided $80 billion for such work, but the senator contends the money might have been spent in other areas.

Treasury Secretary Timothy Geithner is slated to appear before the Senate Finance Committee on Thursday to testify on U.S.-China relations. 

The hearing will examine how the Asian country is handling its international obligations as well as currency practices and policies that favor local innovation over foreign competitors. 

Friday's disappointing jobs report that showed only a few full-time positions were created in May made a significant impact on consumer and investor confidence, according to the Rasmussen Consumer Index. 

President Barack Obama on Friday criticized oil giant BP for spending $50 million on television ads to manage its public image. He also was not happy about the company planning to distribute $10 billion in dividends to shareholders this quarter. 

"They've got a moral and legal obligation to the Gulf," he told reporters, adding that he did not want BP "nickel-and-diming the folks down here" when it comes to making them whole for the oil spill that has negatively affected their lives.

House Speaker Nancy Pelosi (D-Calif.) on Friday said the economy adding 431,000 jobs in May was "another step forward for our middle class." 

"This year, we have added an average of 200,000 jobs per month, a majority in the private sector, a stark contrast to the Bush administration record of losing an average of nearly 750,000 jobs per month in its last three months," she said in prepared remarks.

The Dow Jones Industrial had fallen more than 300 points on Friday afternoon.

Alan Krueger, the Treasury's Chief Economist and Assistant Secretary for Economic Policy, on Friday told reporters recent indicators suggest the economy is moving as the Obama administration expected. 

"The improvement we have seen in the economy is on track with the administration's outlook for the year," he said. 

Krueger's comments came on the heels of news that the economy added 431,000 jobs in May, but nearly all of them were temporary workers hired by the Census Bureau. The private sector added 41,000 workers, according to the Labor Department.

Krueger admitted that the gain in permanent jobs was smaller than expected and said job growth would not be consistent given the severity of the recent recession. 

Rep. Jim McDermott (D-Wash.), chairman of the House Ways and Means subcommittee on family issues, will hold a hearing June 10 on possible policy responses to long-term unemployment.

While the economy is showing signs of improvement, nearly 46 percent of all unemployed workers have been without a job for over six months, a record high since the statistic was created in 1948.

McDermott claims over 10 million jobs need to be created to restore the labor market to pre-recession levels and stresses that extensions to unemployment insurance need to continue until the job scene is greatly improved.

The growth of the job market is still going to take some time despite signs of a steadily growing economy, a top administration official said Thursday. 

"The economy has been growing now for four quarters, and you've seen in the last five to six months a pretty steady gradual increase in the amount of jobs the private sector is creating and all the indicators suggest that its getting stronger," Treasury Secretary Timothy Geithner said Thursday in a CNBC interview. 

"Now, it's not going to be even, it's not going to be steady, it's still going to take awhile."

Jobs numbers for May will be out Friday morning and are expected to reflect a more than 500,000 job gain, although many of those jobs are tied to temporary hiring for the Census. 

An increase in consumer confidence should continue to bolster the strength of the private sector and private demand and investment, he said. 

"You're seeing that starting to translate into longer hours worked, more jobs created and, therefore, stronger income growth for the average American," Geithner said.