Latest / The Macro Memo with Fexingo: Daily Conversations on Inflation, GDP, and Federal Reserve Policy
Why the Fed Watches the Labor Force Participation Rate
The Fed's favorite inflation gauge, core PCE, came in at 3.3% annually for July — still above target. But beneath that headline number, a quieter story is unfolding in the labor market: the participation rate, which has been slowly climbing, is changing how the Fed reads wage pressure and inflation. In this episode, Lucas and Luna dig into why participation matters more than the unemployment rate right now, how it complicates the Fed's 'maximum employment' mandate, and what a two-point policy shift from Fed officials like Warsh and Hammack means for the next rate decision…
The skinny
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