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Atlanta Federal Reserve Leader Says Workforce Pressure and Inflation Continue

Filling jobs continues to present a challenge to businesses – even as the economy softens, David Altig, Ph.D., Atlanta Federal Reserve executive vice president and director of research, said today.

At the Chattanooga breakfast, Altig said inflation is moderating but still too high to be consistent with Federal Open Market Committee objectives.

The Chattanooga Area Chamber of Commerce Economic Outlook Breakfast, Presented by Bank of America, took place at the Walker Theatre in Chattanooga. The in-person event was also streamed live: https://www.youtube.com/live/7qI9q8M2KH0?feature=share

Economic Outlook Breakfast inside The Walker Theatre lobby. Photographer: Marcherie Savage

Altig addressed inflation, workforce shortages, and monetary policies affecting businesses.

Top takeaways:

  • Filling available jobs will help to curb the rate of inflation, but due in large part to the exodus of workers into retirement, will remain a challenge for employers even as the economy softens
  • Recent trends include a significant but slow decline in the rate of inflation, as well as more robust spending by consumers. Wages have also been rising, but not by large margins when adjusted to account for inflation 
  • Across the spectrum of income levels, the U.S. savings rate exploded during the pandemic
  • The robust consumer activity occurring now is, in part, a spending down of that excess savings that households accumulated during the pandemic
  • Supply-chain disruptions will continue to improve, or businesses will adjust accordingly, also helping to bring down the rate of inflation 
  • As Fed efforts to slow down inflation continue, a “soft landing” where the economy shifts from growth to slow-growth to potentially flat, as it approaches but avoids recession, is still entirely possible
  • Worker labor force participation of 25-to-54-year-olds is essentially back to pre-pandemic levels
  • And, 80% of the growth in labor force in 2021-22 was due to immigration.

The views Altig expressed are his own and are not necessarily those of the Fed.

Altig also praised Greater Chattanooga regional efforts to improve workforce development.

“Shout out to all of the workforce development efforts that Chattanooga is very known for. There lies our future,” Altig said.

Watch Altig’s presentation, as presented to greater-Chattanooga business leaders at Walker Theatre, below.


Featured image: David Altig, Federal Reserve of Atlanta. Photographer: Marcherie Savage

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