"We are still suffering from the negative effects of the [coronavirus] pandemic," Powell said, citing labor shortages in healthcare and ongoing difficulties with childcare services, along with other issues such as a health crisis.
The non-farm report released last month also showed that the labor participation rate in the United States recorded 62.8% in August, which has rebounded 2.6 percentage points from the low of 60.2% in 2020, but there is still a certain gap compared with the level before 2020.
U.S. labor Force participation rate
And while the overall U.S. employment picture appears relatively stable, job openings in health care, social workers, and state and local government are increasing. This also means that the long-term unequal distribution of health care resources in the United States among different income and ethnic groups is increasingly exposed.
Powell told business and community leaders that the administration is stepping up efforts to bring more people into the workforce. He added that if a good Labour market continued for a while, "there would be more good things to come" than real wage growth.
"In fact, as the expansion gets longer, more and more of the wage demand is going to those at the lower end of the wage scale." "It's all very beneficial. But for that to happen, history has shown very clearly that we need a stable price."
In an effort to rein in high inflation, the Fed has raised interest rates 11 times since March 2022, taking them from near zero to 5.25% to 5.5%, the highest level in 22 years. Powell has repeatedly said there is "a long way to go" to control inflation, but many see multiple risks from higher interest rates.
Today, Powell explained to the gathering that "price stability has been a key cornerstone of the overall economy for many years." Shortly before press time, Michael Barr, the Fed's vice chairman for financial supervision, also said he agreed with Powell that interest rate adjustments can be made cautiously.
Barr also mentioned that the Fed may have reached, or is close to, a sufficiently restrictive level of interest rates, but will likely need to keep current high rates for some time. Barr believes that central bank interest rates can bring inflation down to 2%.
On the same day, the Federal Reserve also announced on its official website that it launched official accounts on Instagram and Threads to allow more people to access Fed related news and economic education content. The Fed already catalogs the bank's public information on seven social platforms.
