Job creation in the US has slowed to essentially zero, Federal Reserve Chair Jerome Powell said Wednesday as the Fed released its latest economic projections, which included slightly higher economic growth than previously projected and little change to the unemployment rate.
Altogether, Powell said, central bankers see “a degree of stability” in the labor market.
“But the thing that I think a good number of people on the committee are concerned about is just the very, very low level of job creation,” Powell said in a press conference following the Fed’s decision to hold interest rates steady.
“Effectively, there’s zero net job creation in the private sector,” after accounting for revisions over the past six months, Powell said. “But actually, that looks like that’s about what the economy needs, in terms of dealing with very, very low — nonexistent, really — growth in the labor force, which of course we’ve never had in our history.”
Indeed, the country may not need as many jobs as it once did amid lower labor force participation rates and immigration declines. But Powell also noted that “labor demand has clearly softened as well.”
The job market hasn’t shifted dramatically since Powell’s last press conference in late January. But whatever brief glimmers of optimism existed are now in doubt. The unemployment rate, now at 4.4%, ticked back up in February as the economy shed 92,000 jobs, while December and January’s job gains were revised lower by 69,000, meaning there’s been barely any job growth in three months.
In their new policy statement, Fed officials removed language that noted the “unemployment rate has shown some signs of stabilization,” saying instead that “job gains have remained low, and the unemployment rate has been little changed in recent months.”
