Yellen has long held that even as the unemployment rate falls, "slack" in the labor market remains. This is significant, because it means that gains in employment will not necessarily lead to higher wages and thus increasing inflation.Labor market participation is at its lowest ebb since the late 1970s, a period when women's participation in the labor force was increasing. To see the BLS statistics, go here and set the parameters for 1978 to 2014. People not currently in the labor force constitute "slack."
Once people qualify for Social Security disability payments, as nearly 9 million have, the likelihood of most ever going back to work full-time is relatively small. On the other hand, their income from SS will never support a lavish lifestyle so their spending won't be much help toward an economic recovery.
