As a P.S. to my column below about conservatives chastising Ben Bernanke for trying to reduce unemployment, I have to co-sign this statement from economist Karl Smith:
I had considered oil prices to be the primary threat to an accelerating recovery. I do think the fundamentals are ripe for an accelerating job creation rate. 300K+ a month is not fundamentally unrealistic at all.
I [now] believe, however, a panic-y federal reserve and an over-obsession with keeping inflation expectations moored is the biggest threat.
For now I think it should be the mission of every Journalist to harp on Fed Officials as to why they are willing to tolerate half a decade of unemployment above 5% and the devastation and loss of skills associated with that but they are not willing to tolerate Core-PCE rising above 2%?
The economy is improving but not at a very fast rate. The St. Louis Fed has a chart showing that the average duration of unemployment seems to be stabilizing at around 40 weeks. While it is a relief it is not getting higher, hypersensitivity to inflation shouldn't stop that number from getting lower.
