There is little evidence that the bulk of U.S. unemployment today is structural, but such a problem could develop if more people don't find work quickly, the Wall Street Journal reported, citing an interview with Federal Reserve Governor Daniel Tarullo.
"If you don't get unemployment down more quickly than it seems to be going now, we could have more of a structural unemployment problem in the future," Tarullo, who supervises regulatory affairs at the U.S. central bank, was quoted as saying.
Unemployment could be reduced by boosting demand in the economy, meaning if the Federal Reserve or the Congress did more to bolster consumption, more Americans would have jobs, Tarullo said.
"Most of the difference between the prerecession and current unemployment rates is attributable to an aggregate demand shortfall," Tarullo said.
Tarullo has spent the past few months consulting with Fed and other labor economists for a speech on the job market he is to deliver Thursday at Columbia University, according to WSJ.
The tepid pace of the U.S. economy recovery has left the Federal Reserve searching for more ways to boost output and lower an unemployment rate stuck above 9 percent. It has already cut overnight lending rates to near zero and pumped about $2.3 trillion into the economy.
Economists are cautiously optimistic job creation will gather momentum, and pointed to the moderation in layoffs evidenced by a recent drop in claims for state jobless benefits.
First-time claims have circled around the 400,000 mark that is usually associated with some improvement in the jobs market for three straight weeks. In addition, a four-week moving average, considered a better measure of labor market trends, fell 7,000 to 408,000 in early October.
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