Powell On How The Fed Defines "Full Employment"

Q on how the Fed defines "full employment", what metrics, e.g. Prime age participation?

• Powell says it's a "broad based and inclusive goal that is not directly measurable, and changes over time due to various factors. You can't specify specific goals, it's taking into account a broad range of things, levels, participation... There are also other measures of what's going on, like wages... Quits, job openings...you make an overall judgment.
• "A lot of what we are seeing in the last 90 days is because of Delta...we were on the path to a different place. We see these things."
• Ideally we would see further labor market development without another Covid spike, then we would be able to see "a lot".
• Discusses schools reopening, unemployment benefits lapsing: "thought they would produced some sort of additional labor supply, but that doesn't seem to have been the case...I think there is room for a lot of humility here".
• "We have high inflation, and we have to balance that with what is going on in the employment market. So it's a complicated situation. We hope to achieve significantly greater clarity about where this economy is going and what the characteristics of the post pandemic economy are over the first half of next year."