Politics

Fed Chair Doesn’t Know How Many Americans in Workforce

Yellen brags economy is creating jobs but doesn't know labor participation rate

The woman charged with managing the nation’s money supply stumbled over a basic factual question Wednesday: What percentage of Americans are working?

Federal Reserve Chair Janet Yellen testified before the House Financial Services Committee that the economy added about 180,000 jobs a month this year. The pace of the economy is drawing people back into the workforce, she said. That has kept the unemployment rate from falling because people who have given up looking for jobs are not counted in that statistic.

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“I’ve been pleasantly surprised that unemployment rate hasn’t fallen over that time,” she said.

But job-creation numbers and the unemployment rate mean little in the absence of the larger context of the labor force participation rate — the share of all Americans who are working. Many economists believe that is a more accurate gauge of employment because it includes people who would like a job but have given up looking for one.

Read: The Labor Participation Rate, Explained.

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Rep. Frank Guinta (R-N.H.) asked Yellen that very question. She stumbled over the answer, flipping through papers in front of her.

“Is it below 62 percent?” Guinta asked.

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“No I don’t believe so,” she answered, as she continued to search for the figure. “Let met just have a look.”

Yellen put on her glasses.

“Um,” she said.

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Finally, she retrieved the number: 62.8 percent as of August, according to the Department of Labor. That is a couple of ticks higher than the 62.6 percent figure recorded in June, the lowest rate of the year. It also is up from 62.4 percent in September 2015, the lowest of President Obama’s tenure.

But it remains low by historical standards. The rate has been falling steadily since the Great Recession. It stood at 66.1 percent in August 2008, three months before Obama won election to his first term.

The labor picture is even worse for African-Americans. In the second quarter of 2016, the black labor participation rate stood at 61.1 percent, according to the Bureau of Labor Statistics.

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