US unemployment may rise: Fed chief

US Federal Reserve Chairman Ben Bernanke

US Federal Reserve Chairman Ben Bernanke has defended the Fed's $600 billion stimulus plan, saying it's needed to boost the economy and reduce unemployment, but added that joblessness might rise in the near future.

Speaking at a banking conference in Frankfurt on Friday, Bernanke said the move was taken due to concerns over unemployment, lack of jobs for young workers entering the market, and the slow pace of economic recovery, ABC reported.

"Of some 8.4 million U.S. jobs lost between the peak of the expansion and the end of 2009, only about 900,000 have been restored thus far," Bernanke said.

"Of course, the jobs gap is presumably even larger when one takes into account the natural increase in the size of the working age population over the past few years," he added.

Bernanke also raised concern over the people unemployed for a period of more than six months.

"Long-term unemployment not only imposes extreme hardship on jobless people and their families but by eroding these workers' skills and weakening their attachment to the labor force, it may also convert what might otherwise be temporary cyclical unemployment into much more intractable long-term structural unemployment," he stated.

Bernanke expects the struggling US economy to improve but said the country should be prepared if unemployment rises in the future.

"We cannot rule out the possibility that unemployment might rise further in the near term, creating added risk to the recovery," Bernanke noted.

HS/HGL