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Yellen's Fed Refuses to Declare Victory

Janet Yellen on March 19
Janet Yellen on March 19Photograph by Andrew Harrer/Bloomberg

Janet Yellen isn’t one to declare victory and go home. Today, the Federal Reserve chair announced that the central bank will keep working to stimulate the economy even though it has already almost achieved the goal it set for itself in 2012, to bring the unemployment rate down to 6.5 percent.

Fed policymakers thought in 2012 that 6.5 percent unemployment would be a trustworthy sign of strength in the economy and the labor market, allowing the Fed to start curtailing stimulus. But even though the jobless rate has fallen to 6.6 percent in January and 6.7 percent in February, the economy still looks weak by other measures—in particular, elevated long-term unemployment. In February, 3.8 million people had been out of work and looking for a job for more than half a year, according to the Bureau of Labor Statistics.