Austan Goolsbee, President of the Federal Reserve Bank of Chicago, said the U.S. labor market is stable but not performing well [1, 2, 3].
This assessment comes as the Federal Reserve balances the need to curb inflation with the goal of maintaining maximum employment. Goolsbee's comments suggest that while the economy is not collapsing, it lacks the strength to ignore persistent price pressures, a tension that often dictates whether the central bank raises, holds, or cuts interest rates.
Speaking on CNBC's "Money Movers" program on Friday, May 8, 2024, Goolsbee said the implications of the April jobs report [3, 5]. He said that the data shows the economy has been "stable without being good" [6]. Despite this lukewarm description, he said that he does not believe there is significant evidence that the jobs market is falling apart [7].
The Chicago Fed president said that the stability in employment is occurring alongside ongoing inflation worries [1, 2]. This duality creates a complex environment for policymakers who must decide when it is appropriate to pivot toward monetary easing. Goolsbee said his support for future rate cuts, provided the economic data continues to align with the Fed's broader goals [4].
Throughout the interview, Goolsbee said that the job market is basically stable, but not great [8]. His analysis indicates that while the U.S. has avoided a sharp spike in unemployment, the lack of robust growth in the labor sector may limit the economic outlook. The Federal Reserve continues to monitor these indicators to determine the timing and scale of potential policy shifts.
“shows that we've been stable without being good.”
Goolsbee's characterization of the labor market as 'stable without being good' suggests the Federal Reserve sees a narrowing path for a soft landing. By acknowledging stability while signaling support for rate cuts, he indicates that the Fed may be more willing to accept a lukewarm job market if it means successfully bringing inflation down to target levels without triggering a recession.
