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Treasury Secretary Yellen says U.S. is at full employment

Michael E. Kanell, The Atlanta Journal-Constitution on

Published in News & Features

ATLANTA — The economy is strong, the job market is healthy and efforts to add more affordable housing are the best way to reduce inflation, U.S. Treasury Secretary Janet Yellen said Thursday.

Yellen, a former chair of the Federal Reserve System, was in Atlanta for meetings with health care, law enforcement and business officials. She spoke with The Atlanta Journal-Constitution after a closed-door meeting with a small group of business leaders hosted by the Metro Atlanta Chamber.

“We continue to create a remarkable number of jobs,” she told the AJC. “What I see is a very strong job market.”

Nationally, the economy in May added 272,000 positions, according to the Bureau of Labor Statistics. The U.S. has added 2.76 million jobs in the past 12 months, representing expansion at a 1.8% pace.

Much of Yellen’s agenda in Atlanta revolved around fentanyl. Speaking with law enforcement officials at the regional office of the Drug Enforcement Agency, she announced major steps to combat the opioid crisis, including proposed sanctions against several people affiliated with a Mexican criminal organization that officials say is known for trafficking fentanyl and other drugs into the United States and Georgia, which has added 73,900 jobs in the past 12 months.

She later visited Grady Memorial Hospital to highlight opioid treatment efforts.

But at the Metro Chamber, the economy was center stage, said Katie Kirkpatrick, chief executive of the organization. “The state of our economy, particularly interest rates and the housing market, continues to be a focal point for businesses and Georgians alike.”

Asked by the AJC whether she was concerned about the decelerating rate of growth during the past year, Yellen said the dramatic rebound from the pandemic — fueled partly by huge government spending in 2020 and 2021 — has reached a natural limit as most of the people who want jobs find work.

“You would expect that growth to moderate as you got close to full employment and I think that is what has been happening,” she said.

The share of Americans either working or job-hunting, which peaked during the boom of the late 1990s, fell dramatically in the early days of the pandemic and has not returned to that level.


“We have an aging population and an increasing share of the labor has been moving into retirement, with a lot of people moving into retirement during the pandemic,” Yellen said. “You should expect the labor force participation to be trending down.”

A better focus would be “prime-age participation,” that is, employment of people between 25 and 54 years old, she said. “If you look at the prime-age labor force participation, that has been very high.”

The rate of employment for workers in that age range is higher than it was pre-pandemic, although slightly lower than its 2000 peak, according to the BLS.

While no election-year visit by a top official can be deemed entirely apolitical, Yellen made no mention of the face-off this November between her boss, President Joe Biden, and former President Donald Trump, virtually certain to be the Republican nominee despite his recent felony convictions.

She did, however, address inflation, which has been repeatedly cited as a reason for voter dissatisfaction with the Biden administration.

“We see Americans increasingly getting ahead — we see inflation coming down,” Yellen told business leaders in prepared remarks preceding the close-door session at the Chamber. “But on the other hand, we know that families are getting squeezed by high costs.”

The Fed’s rate-hike campaign, which has raised costs for both consumer and business borrowing, has dramatically lowered inflation, but has not hit its goal, largely because housing and apartment prices have kept climbing.

The administration has supported bills that would help, but the supply and prices of homes is often a local issue, Yellen said. “We know many American families have been struggling to find affordable housing. There’s just too little of it.”

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