America's economy needs to recruit more workers: Fed officials

0
76

[ad_1]

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "In their first economic forecasts for 2020, & nbsp;Federal ReserveOfficials said labor force participation was the key to economic growth in the United States. However, these officials disagreed as to whether they expected more legitimate workers to be fired offside and into the world of work. "Data-reactid =" 31 "> In their first economic forecasts for 2020, Federal Reserve officials said labor force participation was key. But these officials disagreed whether they expected more skilled workers to be sidelined and to be put into employment.

Mary Daly, president of the US Federal Reserve in San Francisco, and Robert Kaplan, president of the US Federal Reserve in Dallas, said on Friday that policymakers must be "humble" if they can improve the labor force participation rate (a measure of the total the employee divided by the total population of civilian age)).

Despite the fact that unemployment has steadily dropped to a record low, the labor force participation rate in the United States was 63% and has hardly improved in the past half decade.

The labor force participation rate in the United States has been 63% in the past half decade. Source: United States Department of Labor Statistics, Federal Reserve Bank of St. Louis

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "At & nbsp;an economic conference in San DiegoOn Friday, both Fed officials said they were already happy that the labor force participation rate was not going down. Amid aging populations, automation, and globalization, some policy makers may have expected more workers to get stuck on the fringes of the company. "Data-reactid =" 54 "> At a business conference in San Diego on Friday, both Fed officials said they would have liked to do so to prevent labor force participation from declining given the aging population, automation and globalization, some policy makers may have expected to have more workers trapped at the edges.

"It has been an enormous accomplishment to keep it stable in recent years," said Kaplan, predicting that the rate would drop to 61% in the next few years. Kaplan is a voting member of this year's Federal Committee on the Free Market policy.

However, the minutes of the last FOMC meeting in December show that not all Fed officials are on the same page.

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "" A number of participants found that the workforce The attendance rate could increase even further, ”says the protocol.Released on Friday afternoon"data-reactid =" 57 ">" A number of participants noted that the employment rate could continue to rise, "the minutes released Friday afternoon said.

Labor force participation could be the key to feeding a hungry job market with a historically low unemployment rate of 3.5%. However, this heading does not list workers who have stopped looking for a job because they lack the skills to do the work available.

Federal Reserve chairman Jerome Powell stressed that communities that have suffered the most unemployment highlight the need for the central bank to pay attention to labor force participation.

"I think the fact that these communities have such a high level of unemployment and labor force participation indicates that there is a decline," Powell said on December 11.

<h2 class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Key to growth"data-reactid =" 61 ">Key to growth

Richmond's Fed President Thomas Barkin said in Maryland on Friday that he expected GDP growth to slow to 2% and said the only way to achieve faster growth was through improved productivity or labor force participation.

But Fed officials say improving labor market participation is a job for Congress, not the central bank. For example, job retraining initiatives could better link workers to new jobs, but the Fed has no authority to launch such programs.

"Ultimately, these are the responsibilities of the tax authorities and they have the levers for it," said Daly in San Diego on Friday.

A bright spot for the working population was the participation of workers in the first year of life (between 25 and 54 years), which has increased steadily over the past half decade.

Participation in the prime of life has improved compared to economic expansion. Source: Labor Statistics Office, Haver Analytics, Federal Reserve Bank of San Francisco

Much of this growth is likely due to immigration.

<p class = "canvas-atom-canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "Kaplan has & nbsp;previously noted& nbsp; that more than 50% of employment growth in the past two decades has come from immigrants and their children, which could offset the slowdown in employment growth in an aging population. "data-reactid =" 87 "> Kaplan previously pointed out that over 50% of employment growth in the past two decades has come from immigrants and their children, which could offset the slowdown in employment growth in an aging population.

As the Fed tries to avoid recession in 2020, the key to expanding the longest economic expansion in US history could be in the hands of fiscal policy.

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "The Fed, for its part, telegraphed that it wouldnot tighten in 2020, The next Fed policy-setting meeting will take place from January 28-29. "Data-reactid =" 89 "> For its part, the Fed has telegraphed that it will not tighten policy in 2020. The next Fed policy meeting will take place January 28-29.

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "Brian Cheung is a reporter who deals with the banking industry and the intersection of finance and politics for Yahoo Finance. You can follow him on Twitter.@bcheungz,"data-reactid =" 90 ">Brian Cheung is a reporter who deals with the banking industry and the intersection of finance and politics for Yahoo Finance. You can follow him on Twitter @bcheungz,

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "Read the latest financial and business news from Yahoo Finance"data-reactid =" 97 ">Read the latest financial and business news from Yahoo Finance

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "Follow Yahoo Finance on & nbsp;Twitter.Facebook.Instagram.Flipboard.Smart News.LinkedIn.Youtubeandreddit,"data-reactid =" 98 ">Follow Yahoo Finance on Twitter. Facebook. Instagram. Flipboard. Smart News. LinkedIn. Youtube, and reddit,