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Fed’s Lacker: Much Labor Market Slack Remains Due to Structural Issues

Wall Street Journal (06/26/14) Ben Leubsdorf

Structural issues like skills mismatches between available workers and available jobs are causing a great deal of the weakness remaining in the U.S. labor market, according to Federal Reserve Bank of Richmond President Jeffrey Lacker. These problems are difficult for monetary policymakers to tackle, he said during a speech at Lynchburg College. The standard measure of unemployment may be overstating the health of the economy, and much of the slack in the market could be due to Baby Boomers retiring and young people choosing college over finding a job.