HousingWire Daily Why the Fed doesn’t care about rising unemployment
Dec 17, 2025
Logan Mohtashami, a lead analyst on housing and labor markets, shares insights into the Federal Reserve's stance on rising unemployment. He explains why the Fed is largely unfazed by job data, emphasizing their goal of controlling wage growth. The duo dissects the November jobs report, pointing out inconsistencies and labor market trends that could influence the next Fed chair. Logan also highlights the significance of private-sector job growth over government positions, ultimately linking labor data to upcoming policymaking decisions.
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Fed Comfortable With Rising Unemployment
- The Fed prefers higher unemployment as a tool to lower wage growth and reach 2% inflation.
- Logan Mohtashami says the Fed can tolerate unemployment up to ~5% while keeping policy restrictive.
Labor Data Trend Worries
- The recent jobs trend is weak despite headline quirks and a low six-month average of new jobs.
- Logan argues the Fed remains restrictive because core labor indicators they watch haven't ‘broken’ yet.
Jobless Claims, Not Just Unemployment
- The Fed watches jobless claims four-week average as a break signal, not just unemployment rate.
- Logan notes that the Fed's break threshold is ~323,000 while the current average is under 240,000.