[2] Source: News Release, Department of
Labor.
Note: The commonly used unemployment rate (U3) underestimates unemployment. Not
only does it not include discouraged workers (U6), it also fails to fully
report the pandemic unemployed. In June 2020, at the height of the unemployment
crisis, U3 number indicated that 11.1% of the labor force was unemployed while
the true number was 20%.
[3] In his June 16th conference, Jerome Powell alluded to a rise in the neutral rate of interest. However, at this point, such a rise is not anticipated to take place before 2022.
[4] A reverse repurchase agreement, or "reverse repo" is most easily defined by its opposite: the repurchase agreement, or "repo". In a "repo", the dealer who sells securities to an investor, agrees to repurchase them at a later day, at a slightly higher price. It is a form of short-term borrowing. In a "reverse repo", the dealer who purchases the securities, agrees to sell them back at a higher price at a late date. In the present instance, the selling party is the Federal Reserve which, through this transaction, drains cash from the market.
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