Fed's Parry sees upward pressure on unemployment rate

SACRAMENTO (AFX) - The U.S. unemployment rate is expected to face upward pressure if the current weakness in the economy persists, said Robert Parry, president of the San Francisco Federal Reserve Bank.	    At a press briefing, following a speech to the Sacramento Rotary Club, Parry said that if the economy continues to grow slowly "which seems to be the case in the first half of the year," job growth could also come under pressure.	    Parry's remarks come ahead of Friday's eagerly awaited Department of Labor report on March non-farm payrolls growth.	    Wall Street economists expect the March unemployment rate to rise marginally to 4.3 pct after the unemployment rate held steady on the month at 4.2 pct in February.	    "As long as the economy grows at a rate that is less than its potential, then we are likely to see the unemployment rate move up...and I think that is what is happening at this time," Parry said.	    Turning to the rate of productivity growth in the U.S. economy, which Parry has often said was central to the economic boom of the 1990s, he said that should the current downturn in capital expenditure continue, there will be a knock-on effect on productivity.	    "There is no question that if the dramatic slowdown that we have seen (in capital expenditure) were to continue for a prolonged period, you would see a slowing of productivity," he said.	    However, Parry remains confident that the current slowdown in business investment is only of "a temporary nature," and he expressed confidence that the economy will be able to avoid a recession.	    "I'm encouraged that consumer spending has held up, and that we stand a good chance of avoiding a recession. My expectation is that in the latter half of the year, we will see the economy grow at a faster pace," he added.    

Related stock : (NIL)