Janet Yellen is the Vice-Chairman of the Federal Reserve. Ms. Yellen is from California. In California no economic recovery is taking place. This Spring, the Federal Reserve will need to decide on a continuation of QE. To guide the FED on further QE, I believe Ms. Yellen is already looking at charts–such as the kind displayed below. Updated with fresh data today for December 2010 it shows that California’s total employment has, from a crash bottom, increased by 79 thousand. The very small recovery in jobs seen in the first half of 2010 has now been turned back. | see: California Employment in Millions 2000-2010.
FED observers are quite aware of Vice-Chairman Yellen’s recent theoretical presentation, in which she asserted that quantitative easing would create 3 million jobs in America. Yellen marked this objective to the year 2012, which is now just a year away. If we take Yellen at her word, that she truly believes FED asset purchases will create jobs, surely she would not be willing to exempt her own state–our largest state–from the magical, job-creating powers of the Federal Reserve. Accordingly, it’s now a fair bet that Yellen will use her new position at the FED to argue the case for an extension of QE this Spring.
Data: Labor Force and Unemployment Data page via State of California.