Fed's Bies: Unclear if Unemployment Has Peaked

Federal Reserve governor Susan Bies Tuesday said it was not yet clear if U.S. joblessness had peaked as the economy climbs out of last year's shallow recession.

When asked by reporters after delivering a speech to the Tennessee Bankers Association if she was certain that April's 6 percent unemployment rate would prove the high-water mark for joblessness, Bies said: "No, I'm not."

She noted employment is a lagging indicator and said the general trend in job measures and temporary worker hirings was favorable. Bies cautioned that the numbers are "really noisy" currently, in part due to new seasonal adjustments and to atemporary extension of government unemployment benefits.

Bies said U.S. company executives have little power to raise prices in the current economic environment. "There is basically no pricing ability," she said, meaning the easiest way for companies to boost revenues is by cutting expenses.

The Fed governor said firms were taking a "more prudent" approach to making investments in new equipment and technology and said those spending decisions are often now being made at higher levels within companies and were more likely to involve critical areas that can realize a more immediate payoff.