Yellen: Job gains strong enough to expand labor force

Federal Reserve Chair Janet Yellen said Wednesday the current pace of U.S. job growth is enough to expand the labor force.

In prepared remarks to be given before Congress, Yellen said job gains of 180,000 per month, the average increase so far this year, is “still well above the pace” that the Fed estimates is sufficient to “provide jobs for new entrants to the labor force.”

Yellen added that a steady labor force participation rate reflects improving conditions in the jobs market, and the number of part-time workers who prefer a full-time job is “nearly as low as it was just before the recession.”

Yellen’s semi-annual congressional testimony comes as the Fed prepares to begin unwinding its $4.5 trillion portfolio of government bonds and mortgage-backed securities. She affirmed that the Fed expects to start the process this year.

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The Fed also expects to continue hiking interest rates gradually, Yellen said. The central bank believes GDP growth increased in the second quarter following a 1.4% jump in the first three months of the year.

While Yellen’s assessment of the U.S. economy was positive, she was cautious on other pockets of the world, noting, “a number of our trading partners continue to confront economic challenges.”