Fed President Plosser: Why Unemployment Will Stay Down
Philadelphia Federal Reserve President, Charles Plosser, spoke on Tuesday at the 13th Annual Economic Outlook held at La Salle University. His news on unemployment was highly positive, and he made it clear that he believes the good news is not misleading. In December, Plosser reports the unemployment rate dropped down to 6.7 percent, a total decrease of 1.2 percentage points for 2013, and a much smaller rate than the Federal Open Market Committee had expected.
“Some people, however, feel that the decline in the unemployment rate overstates the degree of progress being made in labor markets because it reflects declines in labor force participation as well as increases in employment,” said Plosser, admitting that some are concerned that the unemployment rate could even see an increase should this prove to be true and workers eventually return to the job hunt.
“Based on research by my staff, I am less concerned about this possibility,” said Plosser in his speech. He points to the loss of the baby boomer generation, saying that, “The declines are driven mostly by demographic changes.”