In a speech on Wednesday, Federal Reserve chair Janet Yellen said the United States was nearing maximum employment and workers were getting difficult to find. This is the same Janet Yellen who less than a year ago said there was still much slack in the labor market.
The Fed also released its Beige Book yesterday, and the tight labor market theme was prevalent in that report as well. Several districts reported critical shortages of skilled labor.
The problem we have is not with the job market. The problem we have is with geography. The people without jobs are living in areas like the rust belt, mining towns, etc. Rather than moving to where the jobs are, they are waiting for the jobs to come to them. Trump promised that will happen, and that’s going to be a tough promise to live up to.
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Some of you are looking forward to Donald Trump’s inauguration tomorrow, others not so much. Regardless of where you stand, I think we’re all ready to get the talk behind us and see what the action will be.
Everyone is expecting a wild ride, and we’ll get that from Trump’s tweets alone. People are also expecting some major policy changes, which are what really matters. But the future isn’t clear on that front.
Just remember this: As Trump is taking the oath, there will be 435 representatives and 33 senators thinking about re-election in 2018.
Dwight Johnston is the chief economist of the California and Nevada Credit Union Leagues and president of Dwight Johnston Economics. He is the author of a popular commentary site and is a frequent speaker at credit union board planning sessions and industry conferences.