The head of the world’s largest retirement fund told CNBC Tuesday that recent sluggishness in productivity growth could be a sign that corporations will beginhiringagain.
“We have seen productivity growth slowing down. That is one of precursors to job creation,” said Roger W. Ferguson, Jr., president and CEO of TIAA-CREF. The fund serves 3.7 million active and retired employees and has $434 billion in assets under management.
“On the other hand, there’s a big hole to fill,” he added. “Unemployment will come down very, very gradually over the next year or so.”
He said that he didn’t expect major changes in the economy next year.
Ferguson, a former vice-chairman of the Board of Governors of theFederal Reserve, said he is in favor of quantitative easing, or QE2. The Fed announced last week that it would buy an additional $600 billionin assets in an attempt to boost the economy.
“No one is really an expert on QE2, and that’s why there’s a debate. We are using a monetary policy tool that rarely, if ever, has been used,” he added.
“We’re doing it against the backdrop of a very uncertain economy. On balance, I think the Fed is doing the right thing.”