Fed’s unemployment stats show higher jobless rate
New York Post - Mar 30, 2016
Because it distrusted the Labor Department’s unemployment statistics, the Federal Reserve — without any fanfare — started calculating its own jobless rate two years ago.
And the Fed’s calculation, called the Labor Market Conditions Index, or LMCI, shows that the US unemployment rate in February was 5.8 percent. That’s much higher than the 4.9 percent official jobless rate reported by the Labor Department.
More important, the LMCI explains a lot — like why Fed chief Janet Yellen is keeping interest rates exceptionally low despite the fact that the economy seems to have surpassed her jobless rate target. It also explains why she has suddenly backed off some of the rate hikes promised for this year.
