MNI BRIEF: Rising Job Participation Keeps U-Rate High: Powell

Federal Reserve Chair Jay Powell said Wednesday people coming back into the U.S. labor market will prevent the unemployment rate from dropping more than half a percentage point this year, but added that was a "highly desirable outcome."

"The reason that unemployment doesn't go down further, given the level of (GDP) growth, is really just that we see participation expanding -- as people coming back into the labor market -- and that actually holds the unemployment rate up. It's a highly desirable outcome. This was the biggest drop in participation since World War II," he told the Senate Banking Committee at a hearing on fiscal aid.

MNI has reported that the Fed is watching closely the employment-to-population ratio, which takes into account labor participation, in judging whether the jobs market is making progress toward its full employment mandate.