Fed chair Jerome Powell said in a speech that Fed has made “great deal of progress towards” a “strong economy and sound financial system”. He pointed to unemployment rate at 3.7% and strong job creation. And there are others signs of strength beyond the labor market. He noted the decline in financial hardship, wage gains, increased household wealth, and elevated consumer confidence.
However Powell also pointed to some “longer-term challenges”. Those include slow growth in wages for lower-income workers. Also, it’s unclear if recent pick up in productivity is a sustainable trend. And, aging population is limiting labor supply growth and potential growth. Decline in economic mobility also reflects the difficulty faced by lower-income Americans in moving up the economic ladder.
