Press conference exchange between EDWARD LAWRENCE and Fed Chair Jerome Powell:

user: Thank you, Mr. Chairman. Edward Lawrence with Fox Business. So with near 4 percent unemployment rate, that should be low enough to bring people in from the sidelines in terms of hiring. But we’re seeing the hiring rates have been stuck at 2023, 2024 levels. So, what’s going on there?

assistant: Yeah, so that’s a feature of the—has been for some time, a feature of this labor market. You have pretty high participation, accounting for aging. You’ve got wages that are consistent with 2 percent inflation, assuming that we’re going to keep getting, you know, relatively high productivity. We’ve got unemployment, you know, pretty close to its natural level. But job—the hiring rate is quite low, but so is the layoff rate. So the, the—you look at initial claims or layoffs. So you’re not seeing people losing their jobs, but you’re seeing that people who don’t have a job having to wait longer and longer. And, you know, the question is, which way does that break? If we were to see a meaningful increase in layoffs, then that would probably translate fairly quickly into unemployment, because people are—you know, it’s, it’s not a—it’s not a big hiring market. We’ve been watching that, and it’s just not in the data. It hasn’t happened. What we’ve had is, is a low-firing, low-hiring situation, and it seems to be in balance now for, you know, for the last six, seven, eight months. That’s where we are. There’s healthy levels of job creation, too. So, overall, it’s a labor market that’s in balance, and, you know, we, we watch it very carefully.

user: So then, have we seen the Administration—the new Administration’s policies in the economic numbers yet? And when do you anticipate that happening?

assistant: In labor? Or in, in other—?

user: In labor and inflation, just across the economy. Have we started to see the new policies take effect in the numbers?

assistant: I, you know, only in a— an early way. I mean, it’s only been a few months, right? You know, for example, the, the layoffs that are happening here are, you know, they’re certainly meaningful to the people involved, and they may be meaningful to a particular neighborhood or region or area, but at the national level, they’re not—they’re not significant yet. But we don’t know. We don’t know what—where that—how far that will go. We’ll, we’ll find out much more. I mentioned that—you, you saw it—we’ve had two, two very strong goods inflation readings in the last two months, which is very unexpected, and, I think, hard to trace it to specific tariffs. But it must have—it must have something to do with—it’s either noise and it’ll come back, and that—that’s very possible, too. But if it is persistent, then it must be to do with, you know, people buying ahead of tariffs, or raising prices ahead of tariffs, and things like that. That—those kinds of things happen, and they’re very, very hard to capture because so much of it is indirect. A great example is there—washing machines were tariffed in the last, last round of tariffs, and prices went up, but prices also went up on, on dryers, which were not tariffed. So the manufacturers just, you know, they just followed the crowd and, and raised it. So things happen very indirectly, and so there’ll be a lot of work done in the coming months to, to try to trace all that through. But, ultimately, though, it’s too soon to be seeing significant effects in economic data.