Fed Chairman Ben Bernanke did not deliver any new news on the labor market or economy but he did provide key reminders. He sees the need for continued monetary accommodation to boost demand and lower unemployment. Bernanke does see improvement in the labor market but it is still far from normal. While there is both structural and cyclical unemployment, he believes most of it is cyclical but he is still concerned about long-term unemployment. As many economists have stated, he agrees that labor market improvement is from fewer layoffs but not from increased hiring. The bottom line is that the comments are consistent with the data and also with most Fed officials agreeing that loose monetary policy is needed for an extended period.
The one notably interesting comment was that the labor force improvement is not consistent with GDP estimates. He suggests that either GDP growth is being underestimated or that the decline in the unemployment rate is overstating improvement in the labor market as potential workers could be giving up on looking for work to an unusual extent. While he did not say so, it obviously could be a combination of the two.