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For immediate release
Contact: Daneil Mazone, Media Relations, 215-574-7163
Philadelphia, PA — Inflation and labor market indicators suggest that the economy is “in pretty good shape,” but fiscal and other policies are necessary to move the needle on economic growth, Federal Reserve Bank of Philadelphia President Patrick T. Harker said today at the La Salle University 16th Annual Economic Outlook.
“After eight-plus long years of recovery, I can say that we’re more or less back to full health,” Harker said. He also said that inflation is on track to meet the Federal Reserve’s 2 percent target this year or next, and that unemployment is at or below its natural rate. “From an economic modeling standpoint, growth right now is more or less what we should consider normal,” Harker said. “My forecast for 2017 is a touch above 2 percent.”
However, Harker said that there are sections of the population that have not experienced economic prosperity through the recovery. “I’m not blind to the realities on the ground, particularly in my own district,” Harker said. “There are pockets here and around the country that have been left out of the rebound.”
To address these economic inequalities, Harker said that investment in human and physical capital is vital. “One of the areas we’ve focused on at the Philadelphia Fed is skills training and alternative routes to education and professional readiness,” Harker said. “The data show that there’s a skills gap. That is, there are jobs out there that can’t be filled because people just don’t have the right training.”
Harker emphasized that the Federal Reserve’s power to spur economic growth is limited. Rather, fiscal and other policies are needed to make substantial changes. “The United States is and has been an economic powerhouse for most of the past century. We’re the world’s largest economy and we have consistently been a source of innovation and invention,” Harker said. “If we want to keep our global edge, it’s time to think about broad policies that look to where we’ll be in the future.”