The Federal Reserve has a dual mandate it relies on to guide monetary policy: maximum employment and stable prices.
Regarding employment, it has become less and less clear exactly how the Fed measures employment when it considers its policy goals.
On Wednesday, we learned that the unemployment rate has become a less important measure to the Fed when it said, "Labor market conditions improved, with the unemployment rate declining further. However, a range of labor market indicators suggests that there remains significant underutilization of labor resources."
In other words, it's not just about unemployment rates and jobs created. The Fed cares about other measures like labor force participation rates, job openings, quit rates, etc.
Regarding employment, it has become less and less clear exactly how the Fed measures employment when it considers its policy goals.
On Wednesday, we learned that the unemployment rate has become a less important measure to the Fed when it said, "Labor market conditions improved, with the unemployment rate declining further. However, a range of labor market indicators suggests that there remains significant underutilization of labor resources."
In other words, it's not just about unemployment rates and jobs created. The Fed cares about other measures like labor force participation rates, job openings, quit rates, etc.
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