Stance of Policy

Let me underscore that our release of this information is not meant to convey any change in the stance of policy. As you know, the FOMC’s views on policy are conveyed in the policy statement, which I will now discuss before coming back to our normalization plans.

As indicated in our policy statement, the FOMC decided to make another reduction in the pace of its asset purchases. The Committee also maintained its forward guidance regarding the federal funds rate target and reaffirmed its view that a highly accommodative stance of monetary policy remains appropriate. Let me discuss the economic conditions that underpin these actions.

The economy is continuing to make progress toward the FOMC’s objective of maximum sustainable employment. In the labor market, conditions have improved further in recent months. Although the pace of job growth has slowed some recently, job gains have averaged more than 200,000 per month over the past three months. The unemployment rate was 6.1 percent in August, two-tenths lower than the data available at the time of the June FOMC meeting.

Broader measures of labor market utilization, such as the U-6 measure, have shown similar improvement, and the labor force participation rate has flattened out. These developments continue the trend of gradual progress toward our employment objective. But the labor market has yet to fully recover. There are still too many people who want jobs but cannot find them, too many who are working part time but would prefer full-time work, and too many who are not searching for a job but would be if the labor market were stronger. As noted in the FOMC statement, “a range of labor market indicators suggests that there remains significant underutilization of labor resources.”