Fed chair Yellen answers the big jobs question
It's the question everyone's asking. Is present unemployment a result of cyclical or structural factors?
The Fed chair said that cylical factors have played the biggest role in the employment rise.
BTIG's chief global strategist Dan Greenahaus says that this insight "really matters", as it suggests that the Fed can and should keep pushing ahead.
Representative Spencer Bachus asked why we're seeing not just high unemployment, but also a falling labour force participation rate.
Yellen said that "an important part of this labour participation decline is structural," but that "there are also cyclical factors at work"
"That decline has a structural component and also a cyclical component," said Yellen.
But she observed that "we're also seeing declining participation among prime age workers and also younger people".
"Some portion of that does reflect discouragement about job opportunities".
So we've got a mix of the both, but again, Yellen is stressing that wider measures of unemployment are very important.
Yellen comes about as close to stating that the US has a mild form of hysteresis as a Fed chair every could.
— Joseph Brusuelas (@joebrusuelas) February 11, 2014