About 7.2 million Americans described themselves as wanting work in May, even though they had given up actively searching and weren’t counted as part of the labor force. That was up from 6.8 million a year earlier, Labor Department data show.
Karen Strong-Daniely, 48, went to Kennesaw State University in Georgia after losing her job at a mortgage company in 2008 following the housing slump. She earned a bachelor’s degree and is in a master’s degree program in public administration.
She’s taken computer classes and says she’s surrounded by “nontraditional students, older students like myself.” While federal, state and local governments have been cutting jobs, Strong-Daniely is optimistic about her future when she graduates in 2014.
“With my degree, I stand a better chance of landing a position than I did before I went to school,” she said.
Raising Questions
The Fed’s focus on a 7 percent unemployment rate has raised questions about how much emphasis it will give other labor- market indicators, such as payroll growth, in deciding when to stop buying assets. What’s particularly unclear is how the central bank will react if the jobless rate falls to its new threshold simply because more Americans leave the labor force.
Investors aren’t sure how the end of quantitative easing will play out, said Nathan Sheets, former global head of the Fed’s international-finance division and now global head of international economics at Citigroup in New York. The central bank should explain in greater detail how it expects the participation rate to evolve and how policy will be influenced if it fails to pick up, Sheets said.
“This is creating confusion for the markets about how to interpret the announced guideposts for the unemployment rate,” he said.