Fed’s Kaplan: We’re Rapidly Moving Toward Full Employment

The video discusses the need for additional fiscal stimulus due to two major economic headwinds: slow labor force growth and weak productivity growth. It emphasizes that monetary policy alone is insufficient and suggests structural reforms, regulatory reviews, and infrastructure spending to address these issues. The speaker believes there is additional labor slack, particularly among those with lower educational attainment, and highlights the importance of vocational training to improve workforce skills. The December employment report indicates progress toward full employment, with notable wage growth suggesting a tightening labor market.

What are the two major economic challenges discussed in the first section?

• Rising debt and currency devaluation

• High inflation and unemployment

• Slow labor force growth and weak productivity growth

• Trade deficits and high interest rates

What is suggested as a solution to bring more people into the workforce?

• Reducing taxes

• Implementing vocational training and retraining programs

• Expanding unemployment benefits

• Increasing minimum wage

According to the second section, where is labor slack primarily found?

• In sectors with high educational attainment

• In the healthcare sector

• In sectors with low educational attainment

• In the technology sector

What does the December employment report indicate about the labor market?

• It indicates a rise in unemployment

• It shows a decline in employment

• It suggests a stagnant labor market

• It is consistent with moving toward full employment

What does the wage growth in the December report suggest?

• A decrease in labor market tightness

• A decline in skilled worker demand

• An increase in labor market slack

• A tightening labor force, especially for skilled workers