As I will explain, this very tight labor market has implications for inflation and the Fed’s plans for reducing inflation. But on its own terms, we need to recognize that robust job creation is an underlying strength of the U.S. economy, which is expanding its productive capacity and supporting personal income and ongoing economic growth, in the face of other challenges.
-3Let me turn now to the outlook for the Fed’s top priority, inflation. I said in December that inflation was alarmingly high, and it has remained so. The April consumer price index (CPI) was up 8.3 percent year over year.