Congresswoman Carolyn B. Maloney (NY-12), Vice Chair of the U.S. Congress Joint Economic Committee, highlighted in a hearing today that segments of the U.S. population are still struggling despite a record-long economic recovery and low unemployment.
She was speaking at a hearing with Jerome H. Powell, who appeared before the JEC for the first time as Chairman of the Federal Reserve. He discussed his outlook on the economy in a critical moment for the Federal Reserve, which is attempting to keep unemployment low without allowing consumer prices to increase substantially. Underlying the hearing is the question of whether the economy has reached full employment.
Noting that inflation “remains comfortably below the Fed target rate,” Congresswoman Maloney asked Chairman Powell whether the Federal Reserve could allow the job market to tighten even further to draw more people into the workforce.
In a response that some interpreted as favoring low interest rates, Chairman Powell noted that the strong job market “has many beneficial side effects, including pulling people back into the labor market, including wages moving up for people at the lower end of the wage spectrum. So there's a lot to like about today's labor market, and we'd like to see it continue strong and we're using our tools to try to make that happen.”
You can watch today’s hearing, as well as read prepared testimony from Chairman Powell and Vice Chair Maloney’s opening statement, by clicking here.
Here are excerpts from Vice Chair Maloney’s opening statement:
- “Not all demographic groups have shared equally in the economic growth of the past decade. As members of Congress, we need to serve all Americans.”
- “[I]nflation remains comfortably below the Fed target rate. Which raises the question: has the traditional relationship between unemployment and inflation weakened? If it has, why? Is it downward price pressure from around the globe? Or, increased market concentration in certain industries in the United States eroding worker bargaining power?”
- “And what if unemployment is extremely low – suggesting that we are at full employment, but the unemployment rate for African Americans or Latinos remains much higher? What if the unemployment rate for people in some communities, or those who work in some occupations, is stubbornly high? These are questions with wide-ranging implications for both fiscal and monetary policy.”
- “Manufacturing is in recession, business investment has been shrinking for the past two quarters and productivity fell last quarter for the first time since 2015. Some of these more troubling developments may be a sign of a possible end to our decade-long economic expansion. Or a slow fade from the ‘sugar high’ of the 2017 tax cuts. But the most likely cause of economic uncertainty is the President’s trade war.”
Here are excerpts from Chairman Powell’s prepared testimony:
- “Significant differences, however, persist across different groups of workers and different areas of the country: Unemployment rates for African Americans and Hispanics are still well above the jobless rates for whites and Asians, and the proportion of the people with a job is lower in rural communities.”
- “Looking ahead, my colleagues and I see a sustained expansion of economic activity, a strong labor market, and inflation near our symmetric 2 percent objective as most likely.”
- “However, noteworthy risks to this outlook remain. In particular, sluggish growth abroad and trade developments have weighed on the economy and pose ongoing risks.”
- “We see the current stance of monetary policy as likely to remain appropriate as long as incoming information about the economy remains broadly consistent with our outlook of moderate economic growth, a strong labor market, and inflation near our symmetric 2 percent objective.”