Janet L Yellen: Small businesses and the recovery
Speech by Ms Janet L Yellen, Chair of the Board of Governors of the Federal Reserve
System, at the National Small Business Week Event, US Chamber of Commerce,
Washington DC, 15 May 2014.
* * *
Thank you, Administrator Contreras-Sweet, I am pleased to be at the U.S. Chamber, to have
this opportunity to be part of Small Business Week, and to meet the outstanding
entrepreneurs here this evening. I am also grateful to be able to share a few thoughts on the
important role I believe small businesses have played and will continue to play in America's
recovery from the financial crisis and the Great Recession.
After the onset of the crisis, the Federal Reserve took extraordinary steps to stabilize the
financial system and halt the plunge in economic activity. Since then, the Fed has continued
to use its monetary policy tools to promote the recovery and make progress toward our
mandated objectives of maximum employment and price stability. By putting downward
pressure on interest rates, the Fed is trying to make financial conditions more
accommodative - supporting asset values and lower borrowing costs for households and
businesses and thus encouraging the spending that spurs job creation and a stronger
recovery.
Crucial to this process, as I just mentioned, is job creation. The Federal Reserve tries to
promote the conditions to foster job creation, but, overwhelmingly, it is businesses that create
the jobs. About 85 percent of nonfarm employment is in the private sector, which traditionally
is the source of a similarly large share of new jobs during economic expansions. So far
during this expansion, public-sector employment has declined and the private sector has
accounted for all of the net increase in employment, so businesses have been even more
crucial to job creation than usual.
Small businesses, of course, are responsible for a large share of these new jobs. According
to the latest data from the Labor Department, a little more than half of the net number of jobs
created since employment began growing in 2010 has been generated by firms with fewer
than 250 employees, and most of that amount was accounted for by firms with fewer than
50 employees.1
One of the reasons I wanted so much to be here this evening was to be able to acknowledge
these important contributions. America has come a long way since the dark days of the
financial crisis, and small businesses deserve a considerable share of the credit for the
investment and hiring that have brought that progress. Although we have come far, it is also
true that we have further to go to achieve a healthy economy, and I am certain that small
businesses will continue to play a critical role in reaching that objective.
I am honored to be addressing the owners of 53 small businesses whose excellence
exemplifies the enormous contributions that millions of small businesses collectively make to
our economy. You come from different places and have achieved success in a wide variety
of ways, but you all share the entrepreneurial spirit that has always been central to our
nation's prosperity. We at the Federal Reserve are keenly aware of your vital role, and we
pledge to continue to do our part in promoting the recovery so that you can continue to help
America grow and prosper.
Thank you.