BusinessVertex

on top of the business game

Fed: U.S. economy is in good shape

While media try to convince americans that the U.S. economy is collapsing, data prove otherwise. And Fed sides with data.

Federal Reserve Chairman Jerome Powell said Friday that he U.S. economy is in a good place, though it faces some risks.

In a brief speech to a “Fed Listens” event in Washington, Powell said that “Unemployment is near a half-century low, and inflation is running close to, but a bit below, our 2% objective. Our job is to keep it there as long as possible.”

While Powell didn’t specifically mention Friday’s jobs report in his speech (unemployment fell to its lowest level since 1969), he did speak of “the importance of sustaining our historically strong job market,” noting that many more Americans are benefiting as a result.

“While not everyone fully shares economic opportunities and the economy faces some risks, overall it is — as I like to say — in a good place,” the Fed chairman said.

The same day, during a moderated discussion at Tulane University in New Orleans, Atlanta Federal Reserve Bank President Raphael Bostic said he does not think the U.S. economy is heading into a recession and that stimulus from the Fed should help overcome “bumps” in the road to prolong the expansion.

Prolonged trade tensions with China are causing some businesses to sit “on the sidelines” and have the potential to affect consumers, he said. Still, he projects that the economy will grow above-trend in 2019, lifted by a tight labor market with an unemployment rate at 3.5%.

“There are lots of reasons to be optimistic about this economy,” Bostic said. “But also we need to recognize that there’s a lot of uncertainty out there.”

His message reflected the uncertainty likely to hang over U.S. policymakers as they head into their October meeting. Bostic does not have a vote in determining monetary policy but he will become a voting member in 2021.

Fed officials were divided about the September rate cut, and approved the second rate reduction this year with a 7-3 vote. The Fed’s target rate is now at a range of 1.75% to 2.00%.