Home > Boards > Free Zone > Education > Pubco

Did Discouraged Workers Spook the Fed?

Public Reply | Private Reply | Keep | Last ReadPost New MsgNext 10 | Previous | Next
SJOGRINGO Member Profile
Followed By 41
Posts 3,436
Boards Moderated 4
Alias Born 05/19/10
160x600 placeholder
Belgium Business Confidence Falls in September
Business sentiment in Belgium declined in September for the second consecutive month, after reaching a record high level in July.
Top Company News of the Day
Wheat Climbs on Indications of Tighter Supply -- Daily Grain Highlights
Front Month Nymex Natural Gas Rose 0.69% This Week to Settle at $5.1400 -- Data Talk
Front Month Nymex RBOB Gasoline Rose 0.75% This Week to Settle at $2.1875 -- Data Talk
Costco On Pace for Record High Close -- Data Talk
United Airlines Fined $1.9 Million for Violating Transportation Department's Tarmac-Delay Rule
California Attorney General Appeals Purdue Pharma's Sackler Settlement
2Q GDP Still Seen +6.6% -- Data Week Ahead
Italy to Launch Three New Government Bonds in 4Q
DAX Ends the Week 0.27% Higher at 15531.75 -- Data Talk
CAC 40 Index Ends the Week 1.04% Higher at 6638.46 -- Data Talk
STOXX Europe 50 Index Ends the Week 0.82% Higher at 3550.35 -- Data Talk
EURO STOXX 50 Index Ends the Week 0.67% Higher at 4158.51 -- Data Talk
STOXX Europe 600 Index Ends the Week 0.31% Higher at 463.29 -- Data Talk
FTSE 100 Index Ends the Week 1.26% Higher at 7051.48 -- Data Talk
Nike Down After Revenue Miss, Supply Chain Issues
Kansas City Fed Services Activity Index Slips But Stays Positive in September
VC Daily: Question: What to Make of Efforts in Congress to Lower Drug Prices?
Turkish Lira Falls Near Record Lows After Rate Cut; Norges Bank Raises Rates; Purchasing Managers Point to Slowing in U.S. and Europe
U.S. New Home Sales Rose in August
Rite Aid Expands Partnership With Uber
Salesforce.com on Track for Record High Close -- Data Talk
Nike Down Over 6%, on Pace For Largest Percent Decrease Since June 2020 -- Data Talk
Walgreens Rolls Out More Pfizer Booster Shots
Moderna to Supply Covid-19 Vaccine Doses in Peru
Petrofac Shares Rise on Guilty Plea to Seven Counts of Bribery
WPP to Pay $19 Million to Resolve SEC Charges of Anti-Bribery, Accounting Provisions
SJOGRINGO   Wednesday, 09/18/13 08:10:40 PM
Re: SJOGRINGO post# 8
Post # of 40 
Did Discouraged Workers Spook the Fed?
September 18, 2013 Bloomberg.com
by Mark Gimein

The Federal Reserve today, shocking most observers, announced it would continue its stimulus policies without reducing bond purchases. The news sent U.S. markets to record highs. The big surprise here is that almost everyone expected the Fed to start tapering now that unemployment is drawing close to 7 percent.

Except that it's not.

As folks have been pointing out for a while (see, for instance, The Atlantic's Jordan Weissmann), the unemployment rate - now 7.3 percent - has been driven significantly not by workers gaining jobs, but by people giving up on looking work and so no longer getting counted as unemployed.

You can see the pattern in the chart of labor force participation below; the end of the recession and nominally improving economy has hardly slowed the outflow of workers from the labor force.


Bloomberg's Rich Miller may have called this a week ago, explaining that the Fed is faced with the dilemma of figuring out whether, considering the increase in discouraged workers, the rate really reflects the state of the market.

That feels like the best explanation of the Fed's decision. Another factor here could be that the Fed was worried by a dramatic drop in housing starts and mortgages. Jeff Kearns highlighted that in a Bloomberg story today, noting it could be a strong argument against cutting the stimulus.

Uncomfortable Facts

Never buy or sell based on my posts.Always consult with a licensed securities professional before you buy or sell any security.My posts are opinions only.Never use them as due diligence.My positions are subject to change without notice.
Public Reply | Private Reply | Keep | Last ReadPost New MsgNext 10 | Previous | Next
Follow Board Follow Board Keyboard Shortcuts Report TOS Violation
Current Price
Detailed Quote - Discussion Board
Intraday Chart
+/- to Watchlist
Consent Preferences