WASHINGTON - Unemployment likely will remain high for the next several years because the economic recovery won't be strong enough to spur robust hiring, Federal Reserve officials warned Tuesday.
The cautionary note struck by the presidents of regional Fed banks in San Francisco and Atlanta were the first public remarks of Fed officials since the government reported last week that the nation's jobless rate bolted to 10.2 percent in October. It marked only the second time in the post-World War II period that the rate surpassed 10 percent.
In separate speeches, Janet Yellen, president of the Federal Reserve Bank of San Francisco, and Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, warned that rising unemployment could crimp consumers, restraining the recovery. Consumer spending accounts for about 70 percent of economic activity.
"With such a slow rebound, unemployment could well stay high for several years to come," Yellen said. "In other words, our recovery is likely to feel like something well short of good times."
Yellen envisions the shape of the recovery kind of like an "L'' with a gradual upward tilt of the base.
Lockhart said "very slow net job gains" may occur "sometime next year."
Troubles in the commercial real estate market and the plight of small businesses also will weigh on the recovery, they said.
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