The real unemployment rate in the U.S. is closer to 10 percent, Federal Reserve Chairman Jerome Powell said Wednesday, after misclassification errors are factored in to the official government figure. The current unemployment rate, as reported by the Bureau of Labor Statistics last week, is 6.3 percent.
“We are still very far from a strong labor market whose benefits are broadly shared,” Powell said, in a virtual speech for the Economic Club of New York on the state of the labor market. “The pandemic has led to the largest 12-month decline in labor force participation since at least 1948,” he said.
While the national unemployment rate has fallen from its March peak of 14.8 percent, it is still much higher than its pre-pandemic level. The unemployment rate in February 2020, before the coronavirus took hold of the economy, was just 3.5 percent, the lowest level in almost 50 years.
“Given the number of people who have lost their jobs and the likelihood that some will struggle to find work in the post-pandemic economy, achieving and sustaining maximum employment will require more than supportive monetary policy,” Powell said, stressing the importance of low interest rates. “It will require a society-wide commitment,” he added.
CNBC: The Fed is keeping its benchmark short-term borrowing rate anchored near zero and is buying at least $120 billion of bonds each month.