Latest / The Federal Reserve Podcast with Fexingo: Interest Rates, FOMC Meetings, and Monetary Policy
Why the Fed Cant Ignore Falling Labor Force Participation
In this episode of The Federal Reserve Podcast, Lucas and Luna tackle a puzzle that's been quietly worrying central bankers: the labor force participation rate has dropped to its lowest level in fifty years, outside of the pandemic era. With the June payrolls report showing just 57,000 jobs added and the unemployment rate at 4.2 percent, Lucas explains why the Fed views falling participation as a structural threat to potential GDP, not a temporary blip. He walks through how a smaller labor pool complicates the Phillips curve framework and makes it harder for the Fed to gauge whether the…
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