Wednesday, February 13, 2013

Federal Reserve Governor: Unemployment is Really at 14.4%

In a speech delivered earlier this week, Federal Reserve Board vice-chair Janet Yellen spilled the beans:
The unemployment rate now stands at 7.9 percent. To put this number in perspective, while that's a big improvement from the 10 percent reached in late 2009, it is now higher than unemployment ever got in the 24 years before the Great Recession. Moreover, the government's current estimate of 12 million unemployed doesn't include 800,000 discouraged workers who say they have given up looking for work. And, as exhibit 6 shows, 8 million people, or 5.6 percent of the workforce, say they are working part time even though they would prefer a full-time job. A broader measure of underemployment that includes these and other potential workers stands at 14.4 percent.
She went on:
The poverty rate has risen sharply since the onset of the recession, after a decade in which it had been relatively stable, and stands at 15 percent of the population, significantly above the average of the past three decades.9 Even those today who are fortunate enough to hold jobs have seen their hourly compensation barely keep pace with the cost of living over the past three years, while labor's share of income--as measured by the percent of production by nonfinancial corporations accruing to workers as compensation--remains near the postwar low reached in 2011[...] It will be a long road back to a healthy job market. It will be years before many workers feel like they have regained the ground lost since 2007. 


  1. Finally someone with a degree states what every high school dropout in America knows? Astounding.

    1. Why do you care whether Janet Yellen has a degree or not? This is Janet Yellen we are talking of. You know who Janet Yellen is?

  2. I don't see how this is news. Most policymakers at the Federal Reserve have consistently argued that the current still depressed state of the economy argues for further policy easing. This includes both the chairman and Dr. Yellen. Ben Bernanke has repeatedly urged Congress to refrain from premature fiscal tightening to not endanger further recovery steps.

    You on this blog on the other hand have painted recent modest increases in housing prices (bringing them nowhere near previous trend levels) as "the next bubble is here". I don't see how this fits together.

  3. Oh, so now that's their excuse for continuing to counterfeit money - that the unemployment rate is nowhere near 6.5%?

    I can see a trend forming.

  4. No. Unemployment is really at 23.0%