It was just a question of time before they would come to the conclusion, given that their brand of stimulus wasn´t very effective, that the problem is “out of their hands”: It´s structural!
The maverick in the pack is Kocherlakota. He has travelled the opposite route.
Kocherlakota in 2010:
What does this change in the relationship between job openings and unemployment connote? In a word, mismatch. Firms have jobs, but can’t find appropriate workers. The workers want to work, but can’t find appropriate jobs. There are many possible sources of mismatch—geography, skills, demography—and they are probably all at work. Whatever the source, though, it is hard to see how the Fed can do much to cure this problem. Monetary stimulus has provided conditions so that manufacturing plants want to hire new workers. But the Fed does not have a means to transform construction workers into manufacturing workers.
Of course, the key question is: How much of the current unemployment rate is really due to mismatch, as opposed to conditions that the Fed can readily ameliorate? The answer seems to be a lot.
The Fed today:
Early in this recovery Federal Reserve officials debated whether slow job growth was the result of cyclical problems in the economy – namely slow economic growth – or secular problems – such as people not having the right skills for jobs that were available. The consensus that emerged at the Fed was that the root of the slow job growth problem was cyclical, and thus the Fed kept stimulating the economy to promote more growth.
A new and different secular vs. cyclical debate about the job market at the Fed is playing out differently. This one isn’t about job growth. It’s about people leaving the labor force. The question is whether people are leaving the labor force for cyclical reasons – again, not enough economic growth or job growth – or secular reasons, such as the retirement of Baby Boomers.
The secularistas are winning this one. Minutes of the Fed’s January policy meeting showed officials came to this conclusion: “Much of the downward trend in the labor force participation rate since the start of the recession was seen as the result of shifts in the demographic composition of the workforce and the retirement of older workers; the extent of the cyclical portion of the decline was viewed by some as difficult to gauge at present.”
To achieve its goals, the FOMC has taken some historically unprecedented monetary policy actions in recent years. But the U.S. economy is recovering from the largest adverse shock in 80 years—and a historically unprecedented shock should lead to a historically unprecedented monetary policy response. Indeed, the FOMC’s own forecasts suggest that it should be providing more stimulus to the economy, not less.