FT's Juan Antolin-Diaz, extracted from a Yellen speech, “Challenges Confronting Monetary Policy”, delivered at the 2013 National Association for Business Economics Policy Conference, Washington, D.C., March 4, 2013, in which she said, "I will discuss some of the additional indicators I plan to consider in judging the strength of the labor market in connection with the Committee's current asset purchase program."
1. The Unemployment Rate“Federal Reserve research concludes that the unemployment rate is probably the bestsingle indicator of current labor market conditions. In addition, it is a good predictor offuture labor market developments.”2. Pace of Payroll Employment Growth“The pace of payroll employment growth is highly correlated with a diverse set of labormarket indicators, and a decline in unemployment is more likely to signal genuineimprovement in the labor market when it is combined with a healthy pace of job gains”3. The Rate of Hiring“Layoffs and discharges as a share of total employment have already returned to theirpre-recession level, while the hiring rate remains depressed. Therefore, going forward,I would look for an increase in the rate of hiring”4. The Quit Rate“A pickup in the quit rate, which also remains at a low level, would signal that workersperceive that their chances to be rehired are good--in other words, that labor demand hasstrengthened”5. Overall Spending and Growth in the Economy“I also intend to consider my forecast of the overall pace of spending and growth in theeconomy. A decline in unemployment, when it is not accompanied by sufficiently stronggrowth, may not indicate a substantial improvement in the labor market outlook.Similarly, a convincing pickup in growth that is expected to be sustained could prompta determination that the outlook for the labor market had substantially improved evenabsent any substantial decline at that point in the unemployment rate.”
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