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October 17, 2013
Chicago Fed's Evans: Unemp Cld Hit 6% Before FOMC Raises Rates
WASHINGTON (MNI) - Chicago Federal Reserve Bank President Charles Evans said Thursday he could "easily envision certain circumstances in which the unemployment rate could go below 6% before we moved the fed funds rate up."
As seen in the chart above, I could easily envision circumstances in which the unemployment rate never reaches 6%, not that you'd ever hear that from the Chicago Federal Reserve Bank President. At least not publicly.
This is not investment advice.
Source Data:
St. Louis Fed: Custom Chart
3 comments:
I could see, with oil prices where they are, unemployment not falling below 6.5%. However, the current price of oil is leading to a lot of investment, job growth and energy efficiency - so as long as you can pass a drug test you can find a decent paying job in the oilfield. Though, my biggest fear is a drop in oil prices due to a recession in China.
Luke Smith,
All Employees: Mining and Logging: Oil and Gas Extraction
Growth in energy jobs is impressive on a percentage basis since 2000, but it is just a drop in the bucket when it comes to overall employment. Out of roughly 140 million employed, only about 200,000 work there.
We need to add just about that many jobs each and every month just to keep up with population growth.
The number of jobs added by high oil prices pales in comparison to the jobs lost by high oil prices (as cconsumers spend more on energy they have less to spend in our labor intensive service economy).
That said, I suspect that if oil prices do fall dramatically from here it will only be because the global economy is falling apart again (just like it did the last time when oil hit $140+).
So in that sense, I share your concern. Hopefully, oil prices can come down due to oversupply and not crashing demand. I am not optimistic though.
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