Odd Lots Neel Kashkari on the Fed’s Quest To Get To Full Employment
Aug 16, 2021
Neel Kashkari, President of the Minneapolis Fed, champions a robust labor market, discussing the lingering challenges post-pandemic. He delves into the complexities of defining full employment amid high inflation and the current economic landscape. Kashkari addresses the importance of labor force participation and critiques the Fed's communication strategies. He also navigates the delicate balance between monetary policies and inflation, urging a reevaluation of traditional economic signals in today's evolving environment.
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Labor Market Recovery
- The labor market is recovering, but still 6-8 million jobs short of pre-pandemic levels.
- Focus remains on bringing back unemployed Americans, representing significant economic potential.
Factors Affecting Employment
- Most Americans want to work if decent jobs are available.
- COVID fears, childcare issues, and enhanced unemployment benefits affect the labor market.
Assessing the Labor Market
- Assess labor market by looking at wage growth, its sustainability, and broader measures of inflation.
- Don't assume current employment is the best it can get; stay humble.