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Why Fed Has Failed to Lower U.S. Unemployment

July 22 (Bloomberg) -- The Federal Reserve has a dual mandate to promote price stability and ensure full employment. It has yet to achieve either. It has set an annual inflation target of 2 percent, yet the consumer price index rose only 0.1 percent in May after falling 0.4 percent in April, and it was up only 1.4 percent in the 12 months ending in May.

The Fed’s preferred metric, the personal consumption expenditures price index excluding food and energy, rose just 1.1 percent in June from a year earlier.