U.S. businesses are unlikely to hire workers at the same level as before the recession even as the economy improves, a top Federal Reserve policymaker said.
"A return to a prerecession configuration of a firm's labor force appears unlikely," Atlanta Federal Reserve Bank President Dennis Lockhart said Thursday at a Fed conference on the business cycle and employment.
Lockhart's comments come the week after the Fed announced a $600 billion bond buying program over eight months designed to kick the anemic recovery into higher gear.
The program has met harsh criticism from some lawmakers in the United States who fear the central bank is financing a massive budget deficit and sowing the seeds of inflation, and from some governments abroad who see a devalued dollar making their exports less competitive.
U.S. officials defend the easing program, arguing the Fed is doing its job of fighting sluggish growth and the risk of dangerous price declines and that the global recovery will not get off the ground unless the U.S. economy expands at a robust pace.
Lockhart, whose previous comments suggest he has been a supporter of the easing move, said employers appear set to do more with fewer workers, although they recognize there are limits to their ability to make existing staff work harder.
Uncertainty about taxes and the impact of healthcare legislation are the main reasons listed by employers in the U.S. southeast as why they are holding off hiring.
"A first priority is that government authorities bring clarity to matters central to business planning," Lockhart said.
The Fed's economic outlook is for a "slow slog" as opposed to a sharp recovery, said Lockhart, who is not currently a voter on the Fed's policy-setting panel.
Information gathered from business people around the country has "helped us avoid overreacting to the false momentum of the spring and what we now interpret as a transitory slowdown over the summer," he said.
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