Chair Powell and members of the FOMC aren’t as unnerved by the increase in the Unemployment Rate from 3.4% in April 2023 to 4.3% in July, since it wasn’t due to a large increase in layoffs. As noted in the August 5 WTR, Chair Powell knows that some of the increase in the Unemployment Rate from 3.4% to 4.3% is from an increase in the supply of labor and not just due to job losses. Chair Powell referenced this in his Jackson Hole speech. “ So far, rising unemployment has not been the result of elevated layoffs, as is typically the case in an economic downturn. Rather, the increase mainly...
