News / Economy

    Yellen: US Job Market Still Hampered

    Federal Reserve Chair Janet Yellen arrives for a dinner during the Jackson Hole Economic Policy Symposium at the Jackson Lake Lodge in Grand Teton National Park near Jackson, Wyoming, Aug. 21, 2014.
    Federal Reserve Chair Janet Yellen arrives for a dinner during the Jackson Hole Economic Policy Symposium at the Jackson Lake Lodge in Grand Teton National Park near Jackson, Wyoming, Aug. 21, 2014.
    Reuters

    U.S. labor markets remain hampered by the effects of the Great Recession and the Federal Reserve should move cautiously in determining when interest rates should rise, Fed Chair Janet Yellen said on Friday in a defense of her policy approach.

    In a speech at a central banking conference here, Yellen laid out in detail why she feels the unemployment rate alone is inadequate to evaluate the strength of the U.S. job market.

    The jobless rate has fallen faster than expected, but Yellen said the economic disruption of the last five years has left millions of workers sidelined, discouraged, or stuck in part time jobs - facts that are not captured in the unemployment rate alone.

    Judging whether the economy is close to full employment is “complicated by ongoing shifts in the structure of the labor market and the possibility that the severe recession caused persistent changes in the labor market's functioning,” Yellen said in the opening address at the Fed's annual economic policy conference.

    “Assessments of the degree of remaining slack in the labor market need to become more nuanced because of considerable uncertainty about the level of employment consistent with the Federal Reserve's dual mandate” of stable prices and full employment, she added.

    In such an environment “there is no simple recipe for appropriate policy,” Yellen said, arguing for a “pragmatic” approach that allows officials room to evaluate data as it arrives without committing to a preset policy path.

    Yellen's speech included lengthy references to the possibility that labor markets may in fact be tighter then they seem, and the Fed may be at risk of having to raise rates sooner and faster than expected.

    But overall the remarks marked a defense of her basic premise that the 2007-2009 financial crisis and recession damaged the economy and work force in ways that are not fully understood.

    The Fed has held benchmark rates near zero since December 2008, and has said it would wait a “considerable time” after winding down a stimulative bond-buying program in October before raising them. Financial markets currently expect rates to raise around the middle of next year.

    The debate over Yellen's evaluation of labor markets - and over when to raise borrowing costs - is intensifying within the Fed's policy committee.

    Some policymakers, including Kansas City Federal Reserve Bank President Esther George, the host of the annual conference in Jackson Hole, Wyoming, are becoming more vocal in their view that the Fed risks falling behind and should raise rates soon.

    At the central bank's last policy meeting in July, some officials argued against characterizing the amount of slack in the labor market as “significant,” which the Fed did do in its post-meeting statement. Many officials agreed that characterization may have to change soon.

    Determining the degree of labor market slack has become the central debate at the U.S. central bank. Yellen wants to be sure employment has recovered as fully as possible before raising rates. Inflation “hawks” at the Fed, however, worry more months of near zero rates will cause inflation or possible asset bubbles.

    A slate of academic papers at the conference will dissect the issue over the next two days, arguing for example that the United States' job-generating ability may be on the wane.

    Outside the conference room, closed to all but the few dozen attendees from government, foreign central banks, academia and the media, Yellen will get some unexpected support.

    A handful of workers in green “What Recovery?” t-shirts are also staying at the resort, pulling policymakers aside as they can in the mountain view bar and main lodge area to press the case that many families are still struggling. 

    You May Like

    Top US General: Turkish Media Report ‘Absurd'

    General Dunford rejects ‘irresponsible' claims of coup involvement by former four-star Army General Campbell, who led NATO forces in Afghanistan before retiring earlier this year

    Video Saving Ethiopian Children Thought to Be Cursed

    'Omo Child' looks at efforts of one African man to stop killings of ‘mingi’ children

    Protests Over Western Troops Threaten Libyan 'Unity' Government

    Fears mount that Islamist foes of ‘unity' government plan to declare a revolutionaries' council in Tripoli

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    London’s Financial Crown at Risk as Rivals Eye Brexit Opportunitiesi
    X
    VOA News
    July 25, 2016 5:09 PM
    By most measures, London rivals New York as the only true global financial center. But Britain’s vote to leave the European Union – so-called ‘Brexit’ – means the city could lose its right to sell services tariff-free across the bloc, risking its position as Europe’s financial headquarters. Already some banks have said they may shift operations to the mainland. Henry Ridgwell reports from London.
    Video

    Video London’s Financial Crown at Risk as Rivals Eye Brexit Opportunities

    By most measures, London rivals New York as the only true global financial center. But Britain’s vote to leave the European Union – so-called ‘Brexit’ – means the city could lose its right to sell services tariff-free across the bloc, risking its position as Europe’s financial headquarters. Already some banks have said they may shift operations to the mainland. Henry Ridgwell reports from London.
    Video

    Video Recycling Lifeline for Lebanon’s Last Glassblowers

    In a small Lebanese coastal town, one family is preserving a craft that stretches back millennia. The art of glass blowing was developed by Phoenicians in the region, and the Khalifehs say they are the only ones keeping the skill alive in Lebanon. But despite teaming up with an eco-entrepreneur and receiving an unexpected boost from the country’s recent trash crisis the future remains uncertain. John Owens reports from Sarafand.
    Video

    Video Migrants Continue to Risk Lives Crossing US Border from Mexico

    In his speech Thursday before the Republican National Convention, the party’s presidential candidate, Donald Trump, reiterated his proposal to build a wall along the U.S.-Mexico border if elected. Polls show a large percentage of Americans support better control of the nation's southwestern border, but as VOA’s Greg Flakus reports from the border town of Nogales in the Mexican state of Sonora, the situation faced by people trying to cross the border is already daunting.
    Video

    Video In State of Emergency, Turkey’s Erdogan Focuses on Spiritual Movement

    The state of emergency that Turkish President Recep Tayyip Erdogan has declared is giving him even more power to expand a purge that has seen an estimated 60,000 people either arrested or suspended from their jobs. VOA Europe correspondent Luis Ramirez reports from Istanbul.
    Video

    Video Calm the Waters: US Doubles Down Diplomatic Efforts in ASEAN Meetings

    The United States is redoubling diplomatic efforts and looking to upcoming regional meetings to calm the waters after an international tribunal invalidated the legal basis of Beijing's extensive claims in the South China Sea. VOA State Department correspondent Nike Ching has the story.
    Video

    Video Four Brother Goats Arrive in Brooklyn on a Mission

    While it's unusual to see farm animals in cities, it's become familiar for residents of Brooklyn, New York, to see a little herd of goats. Unlike gas-powered mowing equipment, goats remove invasive weeds quietly and without adding more pollution to the air. As Faiza Elmasry tells us, this is a pilot program and if it proves to be successful, the goat gardener program will be extended to other areas of New York. Faith Lapidus narrates.
    Video

    Video Scientists in Poland Race to Save Honeybees

    Honeybees are in danger worldwide. Causes of what's known as colony collapse disorder range from pesticides and loss of habitat to infections. But scientists in Poland say they are on track to finding a cure for one of the diseases. VOA’s George Putic reports.
    Video

    Video Wall Already Runs Along Parts of US-Mexico Border

    The Republican Party’s presidential nominee, Donald Trump, gained the support of many voters by saying he would build a wall to keep undocumented immigrants and drugs from coming across the border from Mexico. Critics have called his idea impractical and offensive to Mexico, while supporters say such a bold approach is needed to control the border. VOA’s Greg Flakus has more from the border town of Nogales, Arizona.
    Video

    Video New HIV Tests Emphasize Rapid Results

    As the global fight against AIDS intensifies, activists have placed increasing importance on getting people to know their HIV status. Some companies are developing new HIV testing methods designed to be quick, easy and accurate. Thuso Khumalo looks at the latest methods, presented at the International AIDS conference in Durban, South Africa.
    Video

    Video African Youth with HIV Urge More Support

    HIV, the virus that causes AIDS, is the top killer of teens in sub-Saharan Africa. But many youths say their experience with the virus is unique and needs to be addressed differently than the adult epidemic. VOA South African Correspondent Anita Powell reports.
    Video

    Video Pop-Up Art Comes to Your Living Room, Backyard and Elsewhere

    Around the world, independent artists and musicians wrestle with a common problem: where to exhibit or perform? Traditional spaces such as museums and galleries are reserved for bigger names, and renting a space is not feasible for many. Enter ArtsUp, which connects artists with venue owners. Whether it’s a living room, restaurant, office or even a boat, pop-up events are bringing music and art to unexpected places. Tina Trinh has more.
    Video

    Video Scotland’s Booming Whisky Industry Fears Brexit Hangover

    After Britain’s vote to leave the European Union, Scotland’s government wants to break away from the United Kingdom – fearing the nation’s exports are at risk. Among the biggest of these is whisky. Henry Ridgwell reports on a time of turmoil for those involved in the ancient art of distilling Scotland’s most famous product.

    Special Report

    Adrift The Invisible African Diaspora

    World Currencies

    EUR
    USD
    0.9105
    JPY
    USD
    106.21
    GBP
    USD
    0.7618
    CAD
    USD
    1.3171
    INR
    USD
    67.348

    Rates may not be current.