June 18 (Bloomberg) -- Federal Reserve Chair Janet Yellen said that while she sees progress in reducing the unemployment rate, broader labor market measures still show a need for improvement.
“Underutilization in the labor market remains significant,” she said today at a press conference in Washington following the central bank’s policy meeting. She said she sees “sufficient underlying strength in the economy” to support continued improvement in the jobs market.
The jobless rate has held at an almost six-year low of 6.3 percent for the past two months, down from 6.7 percent in the month preceding policy makers’ last meeting in April. Total payrolls exceeded the pre-recession peak for the first time, climbing to a record 138.5 million.
In updated forecasts released today, most FOMC participants predicted the unemployment rate will be 6 percent to 6.1 percent in the fourth quarter of 2014, and fall to 5.4 percent to 5.7 percent at the end of 2015 and 5.1 percent to 5.5 percent a year later.
Other labor-market gauges Yellen monitors continue to show a sluggish recovery.
The number of people unemployed for 27 weeks or longer as a share of the total jobless dropped to 34.6 percent in May, the lowest since August 2009, from 35.3 percent in April, Labor Department figures showed June 6.
The underemployment rate -- which includes part-time workers who’d prefer a full-time position and people who want to work but have given up looking -- fell to 12.2 percent, the lowest since October 2008, from 12.3 percent.
Payrolls expanded by 217,000 last month. They have increased an average of 213,600 per month this year, putting payrolls on pace for a 2.56 million gain in 2014. That would be the biggest annual employment increase since 1999.