PROVIDENCE – Federal Reserve Chairman Jerome H. Powell on Monday said that “economic conditions are generally good” in the U.S. but that the benefits of an 11-year expansion in the economy “are only now reaching many communities.”
Powell told an estimated 720 business leaders at the Greater Providence Chamber of Commerce’s annual meeting that the “outlook for further progress is good. Forecasters are generally predicting continued growth, a strong job market, and inflation near 2%,” he said in prepared remarks.
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He said continued gains from the expansion can come from “maintaining a stable and reliable pace of 2% inflation and spreading the benefits of employment more widely.”
Powell said the key to the Fed’s ongoing favorable outlook is household spending, which represents 70% of the economy and “continues to be strong, supported by the healthy job market, rising incomes and solid consumer confidence.”
The Fed on Oct. 30 cut interest rates by a quarter-point for the third meeting in a row.
Powell on Monday said the Fed will likely maintain its current stance on monetary policy as long as its outlook of moderate economic growth, a strong labor market and inflation “near our symmetric 2% objective” holds.
He said the Fed is committed to ensuring “households and businesses can reasonably expect 2% inflation over time.”
Powell added that the strong labor market is encouraging more people in their prime working years – ages 25 to 54 – to rejoin or remain in the workforce. But he acknowledged that there is more room for growth in that participation rate.
He said the strong labor market since 2014 has made up more than half of the loss of jobs among that age group during the Great Recession. That’s almost 2 million more people working, “but prime age participation could still be higher.”
He suggested it will take more than sound monetary policy alone to make that happen, however, including policies for elected officials to consider to better prepare workers for technological innovation and global competition.
“At this point in the long expansion, I see the glass as much more than half full,” he said.
Powell was the keynote speaker at an event that also included remarks by Gov. Gina M. Raimondo, Chamber President Laurie White and Alden Anderson, chairman of the Chamber board and senior vice president of CBRE Inc. U.S. Sen. Jack Reed, D-R.I., introduced Powell.
The sold-out gathering was the biggest audience for a Chamber event since former Federal Reserve Chair Janet L. Yellen’s visit to the Ocean State in 2015.
