The leading indicators for the labour market also point to an improvement. This includes fewer layoffs and more job vacancies. Inflation prospects In June we envisaged that this year’s weaker growth would mean that resource utilisation falls, if anything, and then picks up slowly in the coming years. Inflation was judged to rise by degrees but remain moderate. I think that this assessment of future inflation still seems to be fairly close to the mark, although it does look as though growth and thereby resource utilisation could be somewhat higher than we counted on early in the summer. In the shorter run, the effects of a higher oil price must also be taken into account. Still, there are a number of uncertainties that have to be included in the picture. Among other things, as I mentioned earlier, the high oil price’s impact on growth and inflation is difficult to gauge. A related issue is how global competition is likely to affect international price pressure in the coming years. Another central question for inflation prospects is how high future productivity growth will be and thus how corporate costs will develop. How these factors are weighted together at present in our overall assessment of inflation is something to which we shall be returning on 20 October when our next Inflation Report is published. Thank you. 5/5
Here in the Federal Reserve’s Second District, many households in both our urban and rural communities are vulnerable financially. And since the onset of the pandemic, access to quality, nutritious food has been greatly impeded. After many businesses were forced to shut down in the spring of 2020, food banks were quickly overwhelmed. In addition to an abrupt increase in need, there was also the challenge of distribution. I’m sure many of you remember the long lines to food pantries that stretched through neighborhoods. And many of our schools shifted from providing free lunches to students to offering grab-and-go meals to entire families. Now, we are facing another economic challenge: higher food prices. Transportation and labor costs—along with supply-chain disruptions—are driving up the price of many staples, such as beef, poultry, eggs, peanut butter, and produce. Food is not only becoming far more expensive for families, but also for food banks—which, at the same time, are reporting fewer donations. The result of all of this is that food insecurity is becoming more widespread—and more difficult to resolve. The ripple effects expand across the economy, as food insecurity drives economic inequality, which in turn is a barrier to cultivating a healthy workforce. And a healthy workforce is what we need to keep our economy strong. At the New York Fed—and across the Federal Reserve System—one of our key areas of focus is to better understand the economic drivers and social determinants of health.