Reports are showing President Biden is actually in charge of a sinking economy and it’s even worse than we originally thought. Federal Reserve Chairman Jerome Powell said that America’s current unemployment levels are equal to the worst point of the Great Recession. Powell speculates that the real unemployment rate right is hovering right around 10% and not the 6.3% reported last week by the Bureau of Labor Statistics.
“Despite the surprising speed of recovery early on, we are still very far from a strong labor market whose benefits are broadly shared,” Powell said during a virtual speech for the Economic Club of New York on the current condition of the labor market.
Wow.
Fed Chair Powell says the real unemployment rate right now is "close to 10%" –>same level as the WORST point of Great Recession.
"We are still very far from a strong labor market whose benefits are broadly shared," Powell says as he vows to keep interest rates low. pic.twitter.com/5Ehym1vy5V
— Heather Long (@byHeatherLong) February 10, 2021
“The pandemic has led to the largest 12-month decline in labor force participation since at least 1948,” noted Powell.
According to CNBC:
Without misclassification errors that have plagued the Labor Department since the pandemic began in March, the unemployment rate would be closer to 10%, Powell added. He also noted that the impact has been particularly burdensome on lower earners, with employment among the bottom quartile falling by 17% during the coronavirus crisis, while the top tier has seen a decline of just 4%.
To address the disparities, the Fed six months ago adjusted its approach to full employment to make it a “broad and inclusive” goal and said it will not start raising interest rates until that objective is met. Central to the approach is a willingness to allow inflation to run a bit hotter than the Fed’s standard 2% goal for price stability.
Powell noted that in the latter years of the record expansion that ended a year ago, wage and employment gains began to be distributed more evenly while the unemployment rate fell, without the threat of high inflation. When the jobless rate fell in the past, the Fed would hike rates as a way to head off inflation, but will not do so now.
While he said he is confident that Fed’s new approach will lead to better outcomes, he said monetary policy alone can’t do everything.
Powell noted that fiscal programs like the Paycheck Protection Program which allows businesses to keep employees will also help.
Watch Powell confirm the grim truth HERE.
[jwplayer jYUUOrAl-lzmB6GEw]
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