Bernanke: Job creation biggest issue for economy

Although the economy is showing signs of recovery, slow job growth — only 1 million jobs have been created in the face of 8.5 million jobs lost during the recession — continues to weigh on the economy, affecting consumer confidence, spending habits and the housing market. 

The Fed has estimated that the jobless rate could remain around 9 percent through 2011 and still be above 8 percent by the 2012 elections, and could be further stalled if economic growth holds at its current 2 percent to 2.5 percent pace. 

Bernanke also warned that long-term high levels of unemployment could take a toll on U.S. workers. 

“There are obviously very severe economic and social consequences from this level of unemployment,” he said. “So getting new jobs, getting unemployment down is of an incredible importance.”

The national unemployment rate is 9.6 percent and has hovered in that range for more than a year.

Bernanke didn’t discuss the Fed’s recent decision earlier this month to purchase $600 billion in government debt to accelerate the pace of the recovery, which has come under fire from some Republican lawmakers and finance leaders in China and Germany. Those countries have argued that the U.S. is trying to weaken the dollar to help exports.