Fed Chairman Ben Bernanke, in what could turn out to be his last semi-annual congressional update, told a House panel yesterday that 5 percent unemployment is achievable.
Of course, he once pegged 6.5 percent as the rate at which he’d stop printing money.
While both 5 percent and 6.5 percent might be “achievable,” they aren’t likely anytime soon.
If an economic recovery does occur, this would cause more people to start looking for jobs. Once that happens, the BLS will start counting these job hunters as unemployed, and the jobless rate will automatically rise.
Bernanke, who is said to have one foot out the door, told the House panel that the Fed’s bond purchases “are by no means on a preset course.”
Which may mean that he realizes the economy now appears to be slowing from the very modest growth it had been showing at the end of last year and inflation is picking up.
Although Bernanke would like to taper off QE soon and have the Fed end money printing altogether next year, the weak economy isn’t going to allow him to do so.
I predicted this would happen, months ago. And if Bernanke really does know about the statistical quirks that Hall and I addressed above, our Fed chairman would look smarter than he now does. John Crudele