3 Sep 2012

Hint of further measures to boost US economy

9:17 am on 3 September 2012

Injecting more money into the US economy is still an option for the US Federal Reserve.

At a conference in Jackson Hole, Wyoming, on Sunday, Fed chairman Ben Bernanke said:

"The Federal Reserve will provide additional policy accommodation as needed.''

In particular, he suggested that the Fed may pump more money into the economy via quantitative easing. But he stopped short of providing a clear signal of when the Fed might act.

As in Britain, the Fed has tried to support the economy by quantitative easing - buying $US2.3 trillion in bonds in two rounds. The last round of asset purchases ended last year.

The BBC reports many analysts believe the Fed will launch more bond-buying later this year.

Earlier this month, the Fed said a $US267 billion programme to reduce long-term borrowing costs for firms and households would continue for the rest of the year.

It buys longer-term bonds from retail lenders and swaps them for shorter-term bonds.

Mr Bernanke also lamented the fact that unemployment remains high. The United States economy added an extra 163,000 jobs in July, but the unemployment rate rose from 8.2% to 8.3% as more people re-entered the workforce, but failed to find a job.