BREAKING NEWS: John Kennedy Rapid-Fire Questions Fed Chair Jerome Powell About Economy, 'Bidenomics'

Summary

Senator Kennedy discusses the slowing economy, rising unemployment, and the concentration of job creation in government, health care, and social assistance. He highlights the impact of inflation on consumer expectations and the importance of addressing economic challenges, while also questioning the role of corporate greed in causing inflation.

Takeaways

• 📉 The economy is slowing down but still growing at a solid pace.
• 🔍 Unemployment rate is rising, yet the labor market remains strong.
• 📈 Job creation is becoming less broad, with a concentration in government, health care, and social assistance.
• 🏭 Manufacturing is not creating many new jobs, indicating a flat trend in this sector.
• 💻 Information Technology has been shedding jobs over the past two years.
• 🏨 Leisure and hospitality jobs have slowed significantly, suggesting a catch-up after a period of desperate worker shortage.
• 💰 A significant portion of job creation is related to government spending, which may be indirectly linked to deficits.
• 🌐 Consumer expectations play a significant role in the economy, especially in a consumer-driven economy like America.
• 💔 Most Americans do not feel good about the economy, primarily due to inflation.
• 💬 The discussion highlights the complexity of defining economics and how people perceive it in terms of their daily expenses.
• 💡 The Federal Reserve views inflation as an imbalance between supply and demand and aims to adjust demand to align with supply.

Q & A

What is the current state of the economy according to the transcript?

The economy is slowing down but still growing at a solid pace. The unemployment rate is rising, but the labor market remains strong.

Is the labor market slowing down?

Yes, the labor market is slowing down, but unemployment is still low by historical standards.

What does the concentration of new jobs in government, health care, and social assistance indicate?

This concentration suggests that job creation is becoming less broad in the economy and is narrowing.

Is the government the primary creator of jobs in the mentioned areas?

While the government is involved, it is also in-person services and some government manufacturing that is contributing to job creation in these areas.

What is the role of Information Technology in job creation over the past two years?

Information Technology has shed jobs over the past two years, indicating a decline in this sector's contribution to job creation.

How has the leisure and hospitality sector performed in terms of job creation?

The leisure and hospitality sector has slowed almost to a trickle, suggesting that hiring has caught up with demand after a period of desperate worker shortage.

What is the relationship between the jobs being created and the economy's spending deficits?

It is suggested that about 3/4 of the jobs being created can be directly or indirectly related to spending deficits.

What is the role of consumer expectations in the economy?

Consumer expectations play a significant role in the economy, especially in a consumer-driven economy like America's. If consumers expect inflation, they may contribute to its occurrence.

How do most Americans feel about the economy?

Most Americans do not feel good about the economy, primarily due to concerns about inflation.

What is the Federal Reserve's view on the cause of inflation?

The Federal Reserve sees inflation as an imbalance between supply and demand, and they use their tools to work on the demand side to bring it back in line with supply.

Is the Federal Reserve signaling any future actions regarding interest rates?

No, the Federal Reserve is not sending any signals about the timing of any future actions on interest rates.

Outlines

00:00

📉 Economic Slowdown and Job Creation Concerns

Senator Kennedy of Louisiana discusses the state of the economy, noting that while it is still growing, the pace is slowing. He highlights a rising unemployment rate, though it remains low by historical standards. The conversation focuses on the concentration of new jobs in government, health care, and social assistance, suggesting a narrowing of job creation. The senator also mentions that manufacturing and information technology sectors are not creating many new jobs, and leisure and hospitality jobs have slowed significantly. He emphasizes the importance of consumer expectations in the economy, noting that most Americans do not feel good about the economy, primarily due to inflation. The senator concludes by questioning whether inflation is caused by corporate greed.

05:01

💼 Inflation and the Role of Supply and Demand

The speaker addresses the issue of inflation, explaining that it is seen as an imbalance between supply and demand. They mention that the Federal Reserve uses its tools to work on the demand side to bring it back in line with supply. The speaker is cautious about signaling any future actions regarding interest rates, indicating a need for careful consideration of economic conditions before making policy decisions.

Keywords

💡Economy

The economy refers to the system of production, distribution, and consumption of goods and services in a region. In the video, the senator discusses the slowing down of the economy, which is a concern as it indicates potential issues in growth and employment. The economy's health is a central theme as it affects the well-being of citizens and the overall prosperity of the nation.

💡Unemployment Rate

The unemployment rate measures the percentage of the labor force that is without jobs and actively seeking work. It is an important economic indicator that reflects the health of the labor market. In the script, the senator notes that the unemployment rate is rising, which is a negative sign for the economy as it suggests fewer job opportunities and potential economic downturn.

💡Labor Market

The labor market encompasses all aspects of employment, including job availability, wages, and the number of people seeking work. The senator mentions that the labor market is slowing, indicating a potential decrease in job creation and a possible impact on economic growth. The labor market's condition is crucial as it directly affects the livelihood of workers and the overall economic stability.

💡Job Creation

Job creation refers to the process of generating new employment opportunities. The senator highlights that job creation is becoming less broad, focusing on specific sectors like government, health care, and social assistance. This concentration could limit economic diversity and potentially lead to imbalances in the labor market.

💡Government Spending

Government spending is the financial expenditure by the government on various services, programs, and public works. The script mentions that a significant portion of new jobs is related to government spending, particularly in health care. This can be a point of debate as it raises questions about the sustainability of such job growth and its dependence on public funds.

💡Deficits

Deficits occur when a government's expenditures exceed its revenues, leading to a shortfall that is often financed by borrowing. The senator suggests that the creation of jobs in certain sectors might be directly or indirectly related to spending deficits, implying potential fiscal imbalances that could affect the economy's long-term health.

💡Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, leading to a decrease in the purchasing power of money. The senator discusses the impact of inflation on the economy and consumer expectations, noting that it can affect how people feel about the economy and their financial well-being.

💡Consumer Expectations

Consumer expectations refer to the anticipated changes in economic conditions, such as inflation or employment, that influence consumer behavior. The senator emphasizes the role of consumer expectations in the economy, suggesting that if consumers expect inflation, it can become a self-fulfilling prophecy, affecting economic stability.

💡Information Technology

Information Technology (IT) is the application of computers and telecommunications equipment to store, retrieve, transmit, and manipulate data. The script mentions that IT has been shedding jobs, indicating a potential shift in the industry or a decrease in demand for IT services, which can impact the broader economy.

💡Leisure and Hospitality

Leisure and hospitality is an industry sector that includes businesses providing services related to recreation, entertainment, and travel. The senator notes that job growth in this sector has slowed, which could be a sign of a cooling economy or a response to previous hiring booms in response to worker shortages.

💡Interest Rates

Interest rates are the cost of borrowing money and the return on savings. The script briefly touches on the topic of interest rates, with the senator asking about potential actions related to them. Interest rates are a key tool used by central banks to control inflation and stabilize the economy.

Highlights

Senator Kennedy of Louisiana recognizes the economy is slowing but still growing at a solid pace.

Unemployment rate is rising, but the labor market remains strong.

Labor market is slowing, and unemployment is increasing, though still low by historical standards.

Recent job numbers show 3/4 of net new jobs created in June were in government, health care, and social assistance.

Job creation is becoming less broad and is narrowing in the economy.

Government is a significant creator of jobs, particularly in in-person services.

Manufacturing is not creating a lot of new jobs, and Information Technology has shed jobs over the past two years.

Leisure and hospitality jobs have slowed, indicating a catch-up after a period of desperate worker shortage.

Approximately 3/4 of the jobs being created can be related directly or indirectly to spending deficits.

Healthcare spending is not necessarily directly related to deficits.

Consumer expectations play a significant role in the economy, especially in a consumer-driven economy like America.

Most Americans do not feel good about the economy, primarily due to inflation.

Inflation is seen as an imbalance between supply and demand by the FED.

The FED uses its tools to work on the demand side to bring it back in line with supply.

There is a caution against overreacting to the current economic situation.

No signals are given about the timing of future actions regarding interest rates.

Transcripts

Senator Kennedy of Louisiana is

recognized thank you Mr

chairman Mr chairman our uh our economy

is slowing is it

not yes although still growing at a

solid

Pace our unemployment

rate is rising is it not yes it is

although the labor market is still

strong uh

um our labor market is slowing is it not

yes but I I'd say unemployment is still

you know it's still low by historical

standards but yes it is we seemen

cooling

yes and I I was looking at the recent

jobs

numbers I I know you've glanced at them

too

[Music]

um about

3/4 of the net new job jobs that were

created in June were in

government health care and social

assistance what does that tell you so

that's a that's a concentration you

you'd rather see

broader uh job creation than that those

three areas have in some reports they've

they've been as it was this time they've

been the predominant creators of jobs

that tells you that job creation is

becoming less Broad in the economy and

Nar it's narrowing it tells you that

government government's creating those

jobs doesn't it well it's government

it's it's it's it's also in-person

Services it's also uh it's some some of

it's government manufacturing's been

flat yes manufacturing is not creating a

lot of lot of new jobs these days

Information Technology shed jobs over

the past two years hadn't it I don't

know uh Leisure and

hospitality jobs have slowed almost to

trickle so that's a place where where um

there were there was a desperate worker

shortage and they've done quite a bit of

hiring but they're catching up now I

mean three three4 of the jobs that are

being

created in our economy can be related

directly or or indirectly to to to our

our our spending deficits can't

they in this report in this single

report I I don't know that Healthcare is

really uh government spending that's

that's something people where do you

think these hospitals get their money

they may they may get it but I mean

people are not the spending on the

spending on healthc care is not

necessarily directly related to deficits

is my point I I I would disagree with

you

um I mean here's my point we we talk a

lot about

uh uh expectations in terms of inflation

how if we expect there to be

inflation we we'll get

inflation it seems to to me that uh

consumer expectations play a role a

bigger role in the

economy than than than we see to

them um most of our economy is in

America is consumer-driven is it not yes

unlike say China which is manufacturing

driven very much so um and and and I

listen to you site the statistics about

the economy but most Americans um Mo

most Americans don't feel good about the

economy do they no and we don't we don't

tell people how to feel about the

economy I mean isn't it a fact that most

people if you if you ask them to Define

biomics they would say that's easy we

get to pay more to live

worse I I wouldn't touch a uh you don't

want to answer a sentence with that word

in it yeah yeah I mean we can pretty

this up all we I I guess my point is and

I know you're going to do this anyway

but I'd be really careful with this

economy I mean people just don't feel

better off

today and and one can Marshal a

persuasive argument that well you should

compared to Europe or compared to

China um um compared to

Canada but they you know feelings are

feelings people don't feel good about

this economy and it's primarily because

of of

inflation let me use my final 30 seconds

to ask

you I listen to my good friend the

chairman give his opening

statement do you think inflation was

caused by corporate

greed I hate to comment on something the

chairman was speaking about I'll go

ahead well so I will just say we see at

the FED we see inflation as as uh

when there's an imbalance between supply

and demand and we use our tools to work

on the demand side of that and bring it

back into line with Supply I got two

seconds soone are you going to overow

interest

rights I'm I'm today not going to be

sending uh any signals about the timing

of any future actions thank you Mr

chairman