The unemployment rate's unexpected drop to a three-year low has overshadowed a less-positive labor- market development: fewer Americans are looking for work. Last week's Labor Department announcement that the jobless rate fell to 8.3 percent in January sent stocks and bond yields higher. The same report showed the share of working-age people in the labor force had declined to the lowest level in 29 years. The so-called participation rate was cited by Federal Reserve Chairman Ben S. Bernanke yesterday to support his assessment that the rate of unemployment obscures vulnerabilities in the job market. Bernanke, speaking to the Senate Budget Committee, confirmed the Fed's stance that interest rates will stay low at least through late 2014, and repeated his view that the job market is a "long way" from returning to normal. "Weakness in the labor force is frustrating to the Fed, which needs to see broadened participation from labor in this recovery," said Eric Green, chief market economist at TD Securities Inc. in New York. "What the Fed wants is the real stuff. They want unemployment falling with the labor force rising."
The unemployment rate's unexpected drop to a three-year low has overshadowed a less-positive labor- market development: fewer Americans are looking for work.
Last week's Labor Department announcement that the jobless rate fell to 8.3 percent in January sent stocks and bond yields higher. The same report showed the share of working-age people in the labor force had declined to the lowest level in 29 years.
The so-called participation rate was cited by Federal Reserve Chairman Ben S. Bernanke yesterday to support his assessment that the rate of unemployment obscures vulnerabilities in the job market. Bernanke, speaking to the Senate Budget Committee, confirmed the Fed's stance that interest rates will stay low at least through late 2014, and repeated his view that the job market is a "long way" from returning to normal.
"Weakness in the labor force is frustrating to the Fed, which needs to see broadened participation from labor in this recovery," said Eric Green, chief market economist at TD Securities Inc. in New York. "What the Fed wants is the real stuff. They want unemployment falling with the labor force rising."
