Dec. 06 - The unemployment report hits its lowest level in five years- but what that means for the Fed and its economic policy is up for debate. Bobbi Rebell reports.
More Americans got jobs in November than had been expected- and the unemployment rate has fallen to 7 percent. That's getting closer to the Fed's 6-1/2 percent threshold to pare back on its economic support- but that threshold could be a moving target: Chicago Federal Reserve President Charles Evans: SOUNDBITE: CHARLES EVANS, PRESIDENT, CHICAGO FEDERAL RESERVE BANK (ENGLISH) SAYING: "I have certainly mentioned in the past that I would be willing to improve upon our unemployment threshold, to move it down to 6 percent. I think that would further re-inforce that we are going to be in an accommodative mode; if that were done at the time when we began to taper, I might expect that financial markets would view this as neutral and that that would be the right case." Moving the threshold is not the only non- tapering option on the table: LPL Financial Economist John Canally: SOUNDBITE: JOHN CANALLY, ECONOMIST, LPL FINANCIAL (ENGLISH) SAYING: "It's not either taper or no taper. There is a lot of different things that they can do in December. They have talked about some of them publicly that they could reset the thresholds. They could strengthen their forward guidance. They could put an end date or a target dollar amount on quantitative easing. They could even cut the rate on overnight excess reserves. There is a lot of different outcomes for the December meeting. I'm not so sure that the market has grasped that yet. I think the market is just looking at is it taper or don't taper?" But the market is settling into the new- improving economic reality- rallying on the better-than-expected jobs report. Council of Economic Advisors Chairman Jason Furman: SOUNDBITE: JASON FURMAN, CHAIRMAN, COUNCIL OF ECONOMIC ADVISORS (ENGLISH) SAYING: "The unemployment rate is actually lower than where a lot of people forecast it would be at this time of year. It's been coming down by an average of a 10th of a point a month for several straight months now and this past month we also saw the participation rate rise which is good news and you know I think there is a lot of favorable trends in the economy right now." The next Fed meeting is December 17th and 18th: SOUNDBITE: CHARLES EVANS, PRESIDENT, CHICAGO FEDERAL RESERVE BANK (ENGLISH) SAYING: "I'll be open minded. You know everything else equal, I would like to see a couple more months of good numbers but this was improvement." It addition to being the last meeting of 2013, it will also be the last press conference for Fed Chairman Ben Bernanke.