Once jobless and uncounted, eager workers could slow Fed rate hike
By Howard Schneider
WELLSTON, Missouri (Reuters) - The crammed-to-capacity parking lot at a job training center in this St. Louis suburb is exhibit A for why the U.S. Federal Reserve remains at odds over the health of the U.S. labor market and how quickly interest rates should rise.
Among those in the building on a recent fall day, 23-year-old Joshua Goodson described his recent work history as a "dead end." Motivated by the prospect of a firm career foothold, he is now in a program at the Family and Workforce Centers of America that includes both a curriculum in heating and air conditioning installation, and the "soft" social skills needed to keep steady employment.
It will take a few months, but "I will get a job, and nail it," he said.
As the nation's six year run of job creation reaches deeper into neighborhoods like Wellston and nearby Ferguson -- site of a police shooting two years ago that highlighted the depressed economic conditions in some U.S. neighborhoods -- Goodson is among a pool of sidelined workers returning to the labor force in unexpected numbers and more readily landing jobs.
That subtle but surprising shift has stoked fresh debate within the Fed over whether to risk slowing a process that is finally drawing in marginalized residents like Goodson, and showing up in middle and lower end incomes.
The discussion may be unlikely to stave off a December rate increase. But it could influence the already glacial pace of tightening expected by the Fed.
A Reuters analysis of federal labor flow data shows workers are moving from outside the labor force directly into jobs at a record pace. That is what Fed Chair Janet Yellen and others hoped would take hold as the economy rebounded from a crisis that left millions jobless or caused them to stop looking for work and leave the labor force altogether.
It is also something trainees in this high unemployment pocket northwest of St. Louis hope will continue as they learn construction, business administration and other skills, confident there will be steady jobs at the end. Continued...