Fed Chief Yellen ‘Surprised’ by Weak Jobs Report

The new top banker tells the House that cold weather might be to blame for January’s slow growth.

WASHINGTON, DC - NOVEMBER 14: Nominee for the Federal Reserve Board Chairman Janet Yellen (C) leaves after her confirmation hearing November 14, 2013 on Capitol Hill in Washington, DC. Yellen will be the first woman to head the Federal Reserve if confirmed by the Senate and will succeed Ben Bernanke.
National Journal
Catherine Hollander
Feb. 11, 2014, 6:35 a.m.

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The most re­cent two jobs re­ports were much weak­er than most eco­nom­ists were ex­pect­ing — even eco­nom­ists who are in charge of the U.S. eco­nomy.

“I was sur­prised that the jobs re­ports in Decem­ber and Janu­ary — [that the] pace of job cre­ation was run­ning un­der what I had an­ti­cip­ated,” Janet Yel­len said in her first pub­lic ap­pear­ance as Fed­er­al Re­serve Board chair on Tues­day. “But we have to be very care­ful not to jump to con­clu­sions in in­ter­pret­ing what those re­ports mean,” she told mem­bers of the House Fin­an­cial Ser­vices Com­mit­tee as part of the Fed chief’s semi­an­nu­al testi­mony.

The un­season­ably cold weath­er might have con­trib­uted to the lackluster payroll growth in Decem­ber and Janu­ary (just 75,000 and 113,000, re­spect­ively), she noted.

Yel­len re­peated that the Fed’s $65 bil­lion bond-buy­ing stim­u­lus pro­gram, which the cent­ral bank’s policy-set­ting com­mit­tee star­ted to wind down in Decem­ber and Janu­ary with a $10 bil­lion cut each month, was not on a pre-set course. She said that a “not­able change in the out­look” would be ne­ces­sary be­fore the cent­ral bank con­sidered slow­ing the un­wind­ing pro­cess, and she re­it­er­ated that the cent­ral bank would con­sider a range of data when mak­ing its de­cisions about the as­set pur­chase pro­gram. 

The Fed’s policy-set­ting com­mit­tee will next meet on March 18-19.

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