Federal Reserve Chairman Jerome Powell said that while the central bank has made progress toward a “strong economy” with rising wages, many lower-income workers have been left behind.
“The Federal Reserve’s mission is to promote a strong economy and sound financial system,” Powell said Monday in remarks prepared for delivery in Washington. “I am glad to say we have made a great deal of progress toward those goals.”
His comments, at the inaugural Janet L. Yellen Award for Excellence in Community Development, were released by the Fed and had not previously been listed on its schedule of public events.
Powell, reiterating his view of recent U.S. economic strength, said a decline in the U.S. unemployment rate to the lowest level since 1969, wage gains, increased household wealth and higher consumer confidence have supported robust consumer spending. Still, the U.S. economy faces longer-term challenges, including slow growth in wages for low-income workers in recent decades, productivity growth which has picked up only recently, and an aging population, he said.
“The benefits of this strong economy and sound financial system have not reached all Americans,” Powell said. “The aggregate statistics tend to mask important disparities by income, race, and geography.”
Powell’s comments didn’t directly address his economic outlook or policy. Last week, the chairman said that the Fed’s interest rates were nearing the range of estimates that Federal Open Market Committee participants view as neutral which neither spur nor slow the economy.
Powell praised his predecessor Yellen and promised to continue her “message” of bringing about a more inclusive economy that benefits more Americans.
In a similar vein, Fed Governor Lael Brainard, in separate remarks at the event, praised Yellen, noting that she was attentive to lower-income communities that would be hurt the worst in a recession. “Chair Yellen brought the subject of economic disparities to the forefront of our conversations, consistently emphasizing the importance of an economy that works for everyone,” she said.
