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%.

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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.

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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