Given what I’ve said, it is not surprising that I dissented from this decision. I would be remiss if I did not mention one subtlety in my discussion of changes in the mandate dashboard since November 2010. I’ve treated the decline in the unemployment rate as representing a decline in labor market slack. This view is not uncontroversial.
From an accounting perspective, the unemployment rate can fall for two reasons: People can find jobs, or people can stop searching for jobs. Much of the decline since November is attributable to people who were formerly unemployed choosing to no longer look for work.