Janet Yellen is still in her getting to know you phase of her tenure as Fed chairman. After spooking the markets at the last FOMC meeting on the timing of when interest rates will raise, she almost seems to be changing her tune to be much more accommodative than the last press event might have suggested. It seems as though this a correcting of what was intended to be communicated previously on the timing of rate hikes.

Monday morning, Yellen was speaking at the Federal Reserve Bank of Chicago, discussing how the Fed is considerably short of both mandates of full employment and price stability. She said that the job market is still far from healthy and that the economy still requires plenty of support with the low interest rate environment.

In her speech about community reinvestment, she highlighted that several aspects of the labor market are well short of its potential. This job recovery has been harder than any prior recession, and there still are a high number of the long-term unemployed. Yellen also pointed out that 7 million workers are working part-time for economic reasons and because they cannot find a full-time job.

Yellen’s major point, one that allows the Fed to back away further from that 6.5% unemployment rate target for extremely low rates, is that the huge pool of part-time workers is a sign that labor market conditions are worse than the official unemployment rate suggests. One quote stands out above the rest:

The recovery still feels like a recession to many Americans, and it also looks that way in some economic statistics. At 6.7 percent, the national unemployment rate is still higher than it ever got during the 2001 recession. … It certainly feels like a recession to many younger workers, to older workers who lost long-term jobs, and to African Americans, who are facing a job market today that is nearly as tough as it was during the two downturns that preceded the Great Recession.

As for the tapering, it sounds like it will continue. Yellen indicated that the tapering of bond purchases is not a lessening of the commitment, but it is a judgment that recent progress in the labor market means that the aid does not have to grow as quickly.

Yellen’s fulll speech is here.

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