(This is an excerpt from an article I originally published on Seeking Alpha on March 27, 2012. Click here to read the entire piece.)
As conditions ripen for a bottom in housing in 2013, I am more frequently reviewing the on-going dynamics of the unfolding recovery in employment. The rates of unemployment and under-employment, and the wages available from employment, are the biggest wildcards in the presumed housing recovery scenario. Accordingly, I was fascinated by Federal Reserve Chairman Ben Bernanke’s extensive discussion on unemployment in “Recent Developments in the Labor Market” at the National Association for Business Economics Annual Conference in Washington, D.C. (March 26, 2012).
This speech touched on some familiar themes and points. {snip}
Despite my general reservations about the Federal Reserve and its policies, I am encouraged by Bernanke’s laser focus on the problem of unemployment (especially as someone who has been there!). Addressing unemployment in so many other halls of government is stubbornly tainted with the non-winnable ideological struggles of politicians jostling for advantage over one another. Bernanke is free to speak from the data and offer alternative explanations for consideration. {snip}
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In other words, the longer-term health of the economy is at risk if high levels of long-term unemployment persist for much longer.
Bernanke believes that the employment problem is still cyclical and not yet structural:
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Until then, be careful out there!
(This is an excerpt from an article I originally published on Seeking Alpha on March 27, 2012. Click here to read the entire piece.)
Full disclosure: no positions