NEW YORK (TheStreet) -- European Central Bank President Mario Draghi on Thursday called U.S. and eurozone unemployment rates incomparable due to the U.S.'s low labor participation rate and said he had little worry that Congress will resolve the approaching debt limit.
Speaking at the Economic Club of New York, Draghi said that when accounting for the low U.S. employment participation rate, it makes the European Union's 12% unemployment rate "hardly comparable" to the 7.3% rate here.
The August employment report showed the participation rate edged down to 63.2% -- the lowest level in 35 years. The Bureau of Labor Statistics has continued to withhold the September employment report, which originally would have posted on Oct. 4, in accordance with the government shutdown.
Draghi said the United States effectively would have double-digit unemployment if it were not for such low participation.
The central banker also spoke to the looming debt ceiling debate by expressing little concern about the matter."The world still does not believe the United States will not find a way out of this," Draghi said. Draghi's comments came shortly after House Speaker John Boehner proposed a short-term solution to increase the country's borrowing limit. White House Spokesman Jay Carney's response to the news appeared promising to markets as he did not outright reject the plan. Carney said President Obama prefers a long-term agreement.
The ECB head also spent part of a question and answer session providing an update on the European Union's upcoming bank stress tests. Draghi was unable to give any insight into how banks would perform; however, he did acknowledge that lenders in the region are in a better position to raise capital. Deutsche Bank and Barclays have both issued equity to bolster their capital ratio's in recent months.
Draghi also noted that the ECB would be providing new detail on how European authorities coordinate the resolution of failing banks in the region, were such issues to emerge. Major U.S. equity markets on Wednesday were cheering signs of progress in Washington D.C. as the benchmark S&P 500 was surging more than 1.5%, poised for the biggest intraday pop since Jan. 2, the first trading day of 2013. -- Written by Joe Deaux and Antoine Gara in New York. >Contact by Email. Follow @JoeDeaux