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Slok: Economists misunderstood the surprising labor market

Slok: Economists misunderstood the surprising labor market

Originally Published on Yahoo!Finance.com

People who have been outside the labor force for a long time have been bucking conventional wisdom and heading back to work in droves, ignoring naysayers who may view them as “unemployable.”

“The Fed has misunderstood this, we have misunderstood this,” says Torsten Slok, chief international economist at Deutsche Bank. “I would almost argue that any economist out there has actually misunderstood this because we just thought that when people left the labor market they would have lost their skills, they would have lost their qualifications, and therefore they would essentially have become unemployable.”

But that’s far from the case: there is a record number of people continuing to enter the labor market, despite the fact that they’ve been out of it for so long, says Slok, who recently co-authored a report on the labor market.

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