Fed Sees U.S. Economic Growth Downshifting to Moderate Pace

The transcript discusses the Federal Reserve's view on the current economic downshift, largely attributed to the Delta variant and labor shortages. It highlights the impact on employment, with increased turnover and early retirements, and the resulting wage growth, especially among lower-wage workers. The Fed notes a deceleration in economic activity, particularly in dining, travel, and tourism, due to labor and supply chain issues. John Williams of the New York Fed emphasizes the need for more data to assess job growth, while inflation is currently satisfactory. The transcript concludes with anticipation for economic changes post-September, with the end of enhanced unemployment benefits and the return to school.

What factors are contributing to the economic downshift according to the Federal Reserve?

• High interest rates

• Labor shortages and Delta variant

• Strong international trade

• Increased consumer spending

Which group is experiencing particularly strong wage growth?

• Middle-income workers

• High-income workers

• Retired individuals

• Lower-wage workers

What strategies are businesses using to attract employees amid labor shortages?

• Increasing product prices

• Decreasing employee benefits

• Offering more frequent raises and bonuses

• Reducing work hours

What is John Williams' stance on the current labor market data?

• He is satisfied with the current job growth

• He is focused on reducing inflation

• He needs more data to assess labor market goals

• He believes the labor market goals have been met

What was expected to happen in September regarding the economy?

• A significant increase in inflation

• A turnaround in economic conditions

• A decrease in consumer spending

• A rise in international trade