Yellen's bet on pulling workers back to labour force pays off

Washington

EVEN as US unemployment crept lower in recent years, Federal Reserve chair Janet Yellen stuck with a glacial pace of policy tightening that she justified with a powerful message: There were still millions of potential workers to pull in from the labour market's sidelines.

The latest news from the labour market is proving her right. While June's US payroll report keeps the central bank on track to raise rates once more this year and begin unwinding its US$4.5 trillion balance sheet, it also suggests that Ms Yellen's decision to hold interest rates lower than some critics and colleagues preferred has helped heal some of the harm done by the Great Recession.