By Jay Heflin - 10/15/10 01:20 PM EDT
"Although output growth should be somewhat stronger in 2011 than it has been recently, growth next year seems unlikely to be much above its longer-term trend," he told an audience attending a conference by the Boston Federal Reserve Bank. "If so, then job creation may not exceed by much the increase in the size of the labor force, implying that the unemployment rate will decline only slowly."
Details on how the Fed would respond to the weak recovery were not clear, with Bernanke saying that decisionmakers were still discussing how aggressively the bank should act.
"Given the committee's objective, there would appear — all else being equal — to be a case for further action," he said, but added, "Further policy accommodation is certainly possible, even with the overnight interest rate at zero, but nonconventional policies have costs and limitations that must be taken into account in judging whether and how aggressively they should be used."