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Speech
Building the Post-COVID Pipeline: Invigorating Community Colleges
In February, more than 61 percent of the U.S. population was working—the largest share since the Great Recession. In April, the share dropped almost 10 percentage points, to 51.3 percent, with even larger declines for younger workers, women, minorities, and people with less education. While there has been steady recovery, in October the employment-to-population ratio was still 3.7 percentage points lower than before the pandemic. There are 9 million fewer people employed today than in February.With so many people looking for work, how is it possible that so many employers tell us they are ...
Speech
Different Realities, Different Recoveries
My family is fortunate to be healthy, together, and working from home. My grown kids, who left us several years ago, have come back, and it is great fun to be together again. We are surprisingly productive. We are spending less on travel and dining out, so are saving more.But many people are in very different circumstances. Take, for example, those who work in businesses deemed essential. They continue to go to their workplaces. They are proud to have been deemed critical for the safety and security of our country and some are receiving hazard pay. But they know — no matter the precautions ...
Journal Article
President's Message: A Forecasting Personality Test
Contrary to most forecasts, including my own, the economy finished 2023 strong. Inflation, as measured by the personal consumption expenditures price index, came down all the way to 2.6 percent. At the same time, despite higher interest rates, global conflicts, and banking turmoil, economic growth was healthy and unemployment was near historic lows.But early 2024 data has been a little less easy to read, with inflation elevated and consumer spending coming in softer, while the labor market has remained quite strong. So it's easy to see why people might differ on the path forward for the ...
Speech
Anticipating COVID Scarring
A year ago, the economy was on the edge of a cliff. With the help of fiscal and monetary support, we are moving toward recovery.Despite improvements in the economy since last year, this downturn could leave lasting scars. Policymakers have the ability to limit this damage.Many primary caregivers dropped out of the labor force to care for children and elderly relatives during the pandemic. Policymakers should focus on programs that help caregivers return to work.The shift to remote learning could inflict lifelong losses on students with limited access to computers and fast broadband at home. ...
Speech
Will Employers Cast a Wider Net?
An economic recovery has the potential to define the labor market for years. It can shut workers out, leaving them on the sidelines while the labor market heals without them, or it can bring them in, ultimately boosting long-term economic growth.Following the Great Recession, we saw the great majority of jobs go to college graduates. College graduates made up less than 40 percent of the workforce between 2010 and 2016, but as many as 8.4 million jobs of the 11.6 million jobs created during that time went to those with a college degree.1
Speech
The Need to Be Nimble
The challenge in assessing today’s economy is reconciling the strength of the recent data with the potential for weakness coming from the banking system.It is possible that tightening credit conditions, along with the lagged effect of our rate moves, will bring inflation down relatively quickly. But I still think it could take time for inflation to return to target.Policy will need to be nimble. If inflation persists, we can react by raising rates further. If I am wrong about the pricing dynamics at play, or about credit conditions, then we can respond appropriately.
Speech
How Did the Economy Get Here?
A strong but choosier consumer, coupled with a more productive and better valued workforce has landed the economy in a good place.As a consequence, the FOMC has started the process of recalibrating rates to somewhat less restrictive levels.Tomorrow looks different based on whether you take more signal from levels or trends.With the economy now in a good place and interest rates off their recent peak but also off their historic lows, the Fed is in position to respond appropriately regardless of how the economy evolves.
Speech
Investing in Rural America
Since joining the Richmond Fed in 2018, I have visited small towns all across our District, from the coasts to the mountains. Some of these communities are thriving—perhaps they’ve been able to capitalize on natural endowments, or they’ve partnered with neighboring towns, or they’ve found a creative source of funding. But other communities are struggling. They’ve lost employers, residents, or both; their infrastructure is in poor repair; or they’re isolated, geographically and digitally, from necessities like banking or health care.At the Richmond Fed, we’re committed to ...
Speech
Sentiment and the Real Economy
I believe our economy’s performance is driven in important ways by sentiment, that is, the outlook and beliefs of consumers and businesses.At the end of 2018, considerable uncertainty led to large drops in sentiment. We then saw weak numbers in January and February. By the end of February, uncertainty had decreased, and now the data look quite strong.In my view, sentiment has become both more important and more volatile. The result is an asymmetry in which firms are much more cautious about the downside than they are optimistic about the upside. Both consumers and firms may have a higher ...
Speech
Navigating Supply Shocks
Over the last several years, the U.S. economy has faced wave after wave of supply shocks. Conventional central bank wisdom says the Fed should look past supply shocks. This approach of looking through supply shocks has worked well for a generation thanks to what economists call “anchored long-term inflation expectations.”I’ve been asking myself whether we’ve entered an era where supply shocks will become more frequent.Does the Fed have the luxury of riding out all the waves that come our way? For me, it comes down to how much businesses, consumers and inflation expectations can take.