Jobless claims dropped by 23,000 last week

The overall job market is showing signs of improvement — employers added 165,000 jobs in April and the jobless rate dropped to 7.5 percent, a four-year low. But while hiring has picked up, much of the drop in the jobless rate can be attributed to workers who have stopped looking for work. 

Federal Reserve Chairman Ben Bernanke said Wednesday that the central bank will continue its quantitative easing program until the labor market makes significant improvements. The Fed chief provided no indication that the central bank would stop its $85 billion in asset purchases each month. 

He said the Fed is aiming to hold short-term interests near zero until the unemployment rate drops to 6.5 percent. 

Bernanke expressed concern that Fed cannot take any more action to offset the potentially negative effects on the economy this year of a combination of tax hikes and spending cuts prescribed by Washington. 

He suggested that Congress take a less restrictive short-term route to budget cutting and adjust its focus to the unsustainable path that the economy faces, at least, over the next decade.