The decline in the unemployment rate doesn't just reflect an improving job market, it is also equally due to a decline in the labour force participation rate. There are roughly one million people who are no longer in the labour force but would take a job if it was available. Add those to the 13 million unemployed and it is easy to see why the Fed feels it can wait for some considerable time before beginning to tighten policy.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services