Assessing Conditions in the Labor Market (original) (raw)

In the FOMC statements following the September and October meetings, the Committee stated that it will be looking for a substantial improvement in the outlook for the labor market in deciding whether to continue or expand its purchases of longer-term assets. In addition, the Committee has been considering including language in the FOMC statement indicating that the lift-off of the funds rate is unlikely to commence until certain conditions prevail, such as the unemployment rate falling below a certain level. Both of these aspects of the FOMC statement elevate the explicit role of labor market conditions in determining the future course of policy and, in doing so, raise some important issues for policymakers to consider.