Fed Chair Jerome Powell Presents State of Labor Market at Economic Club of New York

Fed Chair Jerome Powell Presents State of Labor Market at Economic Club of New York. The unemployment rate in January added up and calculated would be 10% in January. Decline opportunities for high quartile is 4% and those at the bottom are at 17%. The labor market for high wage individuals improved while those at the bottom decline. This indicates that we are in two different economies that include the virtual and the real. Those that are in the real world economy are suffering because the pandemic closed them down but those in the virtual world are not suffering on the same level (This is why education reform is needed so that each of societal members can have opportunities in technological advancement and its future jobs.) 

There appears to be a direct connect between illness and the economy. When the pandemic is in full swing there is a decline in economic activity. Much of this has to do with closing business to maintain health and safety standard. This is why there is always a risk/reward line where too much closing can impact the economy and opening up too far can lead to increased pandemic illness and have a longer tail of economic slow down. Once this is over we will be able to look at different policies and see which appear to be most advantageous for the future (closing down or adjusting business/social practices). 

Inflation rate is expected to be 2 % and if it is below that there will likely to monetary stimulus. There are some long term projections that the U.S. will have a slower economy because of aging policies. What wasn't discussed, probably because it is difficult to formulate, is that the U.S. competitive position has declined and without some adjustments in how we approach the market and the need for innovative young businesses we are likely to decline more. The high tech savvy Millennials who have interest in business would be the generation that could turn this around. 

There was some discussion on "society wide" coordination needed to create sustainable maximum employment in the future. This has been needed during a time of hyper politics but the pandemic highlighted our truer competitive position and how policy changes are needed.