Federal Reserve Chairman Predicts That Sub 6% Jobless Rate is Years Away
According to Federal Reserve Chairman Ben Bernanke, the United States is likely three years away from seeing a national unemployment rate of under 6%.
During his second day of testimony on Capitol Hill, Bernanke stated that his "reasonable guess" was that the nation is still three years away from seeing a jobless rate of less than 6%.
Over the years, a "normal" unemployment rate has usually meant a national unemployment rate of approximately 5-6%. The United States has been battling against a high unemployment rate since the summer of 2008.
The national unemployment rate is currently sitting at 7.9%.
So, according to Bernanke, the nation may see an unemployment rate of less than 6% by January of 2016.
The last time that the jobless rate was less than 6%? July of 2008 (5.8%).
So, assuming that Bernanke's guess is correct, the United States is in the midst of a 7 1/2 year streak of having a jobless rate of over 6%.
This would end up being a very similar streak to the 70's/early '80s, when the US posted a 6%+ unemployment rate from December of 1979 until September of 1987.
According to the Federal Open Market Committee (FOMC), the national unemployment trend will likely look like this over the next number of years:
2013 - 7.6% to 7.9%
2014 - 6.8% to 7.3%
2015 - 6.0% to 6.6%
Longer run - 5.2 to 6.0%
Source: FederalReserve.gov - Monetary Policy Report to the Congress
Filed under: General Knowledge