Regular readers of Anchor Rising/Ocean State Current know that Justin regularly tracks both (un)employment and labor force participation in Rhode Island. According to Daily Telegraph columnist Ambrose Evans-Pritchard, the President’s nominee to become Chair of the Federal Reserve, Janet Yellen, may be doing the same thing on a national and world-wide scale (if  confirmed by the Senate, of course).  In a column provocatively titled “Rejoice: the Yellen Fed will print money forever to create jobs”, Evans Pritchard states matter-of-factly that…

The next chairman of the Fed is going to track the labour participation rate. Money will stay loose. Markets have been spared again.

…based on his interpretation of a recent statement by Yellen that…

Three million Americans have been looking for work for one year or more; that’s one-fourth of all unemployed workers, which is down from 2011’s peak but far larger than was seen before the Great Recession….

If the current, elevated rate of unemployment is largely cyclical, then the straightforward solution is to take action to raise aggregate demand. If unemployment is instead substantially structural, some worry that attempts to raise aggregate demand will have little effect on unemployment and serve only to stoke inflation.

I see the evidence as consistent with the view that the increase in unemployment since the onset of the Great Recession has been largely cyclical and not structural.

Readers should feel free to try their own hands at macroeconomic interpretation in the comments.

p.s. This post is not meant to imply that Justin supports a strategy of printing money forever to create jobs.