Press conference exchange between CHRIS RUGABER and Fed Chair Jerome Powell:

user: Thank you. Thank you. Thank you, Chair Powell. Wider question about jobs and the Fed’s schedule—the Fed’s policy framework that you laid out here. You and other Fed officials have often talked about expecting a job market pickup in September as more children return to school, freeing up more parents to work, COVID abating. You mentioned in the past the extra unemployment benefits expiring. There’s some real-time data suggesting that we may not be seeing much of a return of labor supply. So do you still expect to see that in the next couple of jobs reports? And how would a relatively weak jobs report in September affect your plans? Thank you.

assistant: So, you’re right, we have a—really, I’ll call it a unique situation where, by many measures, the labor market is tight. And 11 million job openings, very widespread reports from employers all over the economy saying it’s quite difficult to hire people, wages moving up, and that kind—so, quite a tight labor market. So our view, I think— widespread view a few months ago was that several things were coming together in the fall, including kids back to school, which would, you know, which would lighten caregiving duties, including the expiration of unemployment—extra unemployment benefits, and other things would come together to provide an increase in labor supply, and so we’d get out of this strange world where there’re lots of unemployed people and a high unemployment rate but a labor shortage. And so what happened was, Delta happened. And you had this very sharp spike in Delta cases. And I think, so that affects—for example, when schools are open 60 percent of the time or when they’re always at a threat of being closed because of Delta, the Delta variant, you know, you might want to wait. Rather than going ahead and taking a job and starting work only to have to quit it three weeks later, you’re going to wait until you’re confident of that. So some of that may not have happened. Also, people didn’t, you know—as you know, hiring and spending in these face-to-face service industries, travel and leisure, it just stopped during those months. So we—so that—really, the big shortfall in labor, in jobs, was largely in travel and leisure, and that’s because of—clearly because of Delta. So that all happened. And so what we—we know things that didn’t happen. I think there’s still—it may just be that it’s going to take more time. But it still seems that, inexorably, people will—these are people who were largely working back in February of 2020. They’ll get back to work when it’s time to do that. It just may take a longer time. You’re right, though—it didn’t happen with any force in September, and a lot of that was Delta. In terms of the—you asked also about the test for November. I think if the economy continues to progress broadly in line with expectations, then I think—and also the overall situation is appropriate for this, then I think we could easily move ahead at the next meeting. Or not, depending on whether we feel like that, those tests are met.

user: Well, just a quick—if I could just quickly follow up, I mean, what, how much of that will depend on what jobs report we get for September? And, I mean, is it, you know, are you in a data-dependent phase here where you need to see certain numbers going ahead? Or are we at a point where you’ve accumulated enough progress that—

assistant: So it is, it’s accumulated progress. So, you know, for me, it wouldn’t take a knockout, great, super strong employment report. It would take a reasonably good employment report for me to feel like that test is met. And others on the Committee—many on the Committee feel that the test is already met. Others want to see more progress. And, you know, we’ll work it out as we go. But I would say that, in my own thinking, the test is all but met. So I don’t personally need to see a very strong employment report, but I’d like to see a good—a decent employment report. I mean, it’s not, it’s, again, it’s not to be confused with the test for liftoff, which is so much higher.