This article was last updated on April 16, 2022
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USA: Oye! Times readers Get FREE $30 to spend on Amazon, Walmart…With Janet Yellen slated to take over as Chair of the Federal Reserve at the end of January 2014, I thought that it would be interesting to look back at Ms. Yellen's commentary on the U.S. housing market and other aspects of the economy way back on December 12th, 2006 at a meeting of the FOMC. This meeting just happened to be the last meeting that Alan "Bubbles" Greenspan was head of the Federal Reserve. Ms. Yellen is currently the Vice Chair of the Board of Governors of the Federal Reserve, having previously served as President and CEO of the Federal Reserve Bank of San Francisco from 2004 to 2010 when she attended the December 2006 meeting of the Federal Open Market Committee.
I will be posting Ms. Yellen's thoughts in three parts; employment, housing and inflation/productivity.
Here's what happened to the employment-to-population ratio after this meeting took place:
Since construction of housing formed such a key part in America's booming new millennium economy, let's look at what happened to construction employment levels after this meeting took place:
Within 12 months, construction employment had dropped from 7.725 million at the beginning of 2007 to 7.456 million at the beginning of 2008, a loss of over a quarter of a million construction jobs. The level of construction employment continued to drop to between 5.4 and 5.5 million, a total loss of between 2.2 and 2.3 million jobs, most of which have not been replaced to the end of the third quarter 2013.
Apparently, America's job market "may have softened a bit" by the end of 2007, less than one year after the December 2006 FOMC meeting. Perhaps Ms. Yellen's observations about employment in America back in 2006 were the economic understatement of the year! While job markets may have been "roughly in balance" at the end of 2006, things began to unravel very quickly and, within 12 months, the U-3 unemployment rate had risen to 5 percent (and from there to 10 percent), a rate that now seems like a distant and unattainable dream.
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