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That the Fed is even considering a pullback in its bond-buying program is a testament to how far the economy has come from the depths of the Great Recession
-- though it remains far from full health. Employers have added an average of 208,000 jobs a month since November, up from 138,000 during the previous six months. The unemployment rate has reached a four-year low of 7.5 percent from 8.2 percent in July and a peak of 10 percent during 2009. On Thursday, the Labor Department said the number of Americans seeking unemployment benefits fell 23,000 last week to a seasonally adjusted 340,000, a level consistent with solid job growth. The housing market, which had been a drag on growth from 2006 through 2011, is recovering steadily. Sales of new homes sales rose in April, nearly matching the fastest pace in five years and driving the median price to a record $271,600, the Commerce Department said Thursday. Still, Fed Chairman Ben Bernanke on Wednesday told a congressional committee the economy continues to need help. Among other concerns, he and some other Fed policymakers worry that tax increases and spending cuts that kicked in this year are slowing the economy. All of which means the Fed is unlikely to reverse its easy-money policies without evidence that the economy is sturdy enough to withstand the government cutbacks and keep growing at a healthy pace. Once it does, stocks may fall, at least temporarily. In the long run, though, a more robust economy would generate higher profits for U.S. corporations. And that, in turn, would likely fuel higher stock prices.
[Associated
Press;
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