In China, 2016 is the year of the monkey, but in the U.S. it’s looking increasingly like the year of the dove. Economists like myself have been thoroughly perplexed by the Fed’s stated desire to raise rates since the second half of last year. That case always rested on low unemployment rates and a belief that there was some kind of barrier we couldn’t pass without sparking inflation.
This month, more than 4.5 million people who weren’t in the labor force found a job, even though only about 7.7 million Americans were officially unemployed the previous month. Since December, the U.S. economy has added more than 1 million jobs and brought more than 1.5 million Americans into the labor force (based on the household survey).
The above excerpt was originally published in MarketWatch.
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