David Altig, Ph.D.
Filling jobs continues to present a challenge to businesses – even as the economy softens, David Altig, Ph.D., Atlanta Federal Reserve executive vice president and director of research, said Tuesday.
At the Chattanooga breakfast, Dr. Altig said inflation is moderating but still too high to be consistent with Federal Open Market Committee objectives.
The Chattanooga Area Chamber of Commerce Economic Outlook Breakfast, Presented by Bank of America, took place at the Walker Theatre in Chattanooga. The in-person event was also streamed live.
Dr. Altig addressed inflation, workforce shortages, and monetary policies affecting businesses.
“Before the pandemic, we were already in a tight labor-market situation where demand was outstripping supply for several years—and then it just exploded during the pandemic and is not showing any sign of improvement. The wage pressure associated with that excess demand for labor is one of the impediments to getting the inflation rate back to where the federal Open Market Committee wants to go, which is toward a 2 percent inflation rate objective,” Dr. Altig said.
Top takeaways:
Filling available jobs will help to curb the rate of inflation, but due in large part to the exodus of workers into retirement, will remain a challenge for employers even as the economy softens
Recent trends include a significant but slow decline in the rate of inflation, as well as more robust spending by consumers; wages have also been rising, but not by large margins when adjusted to account for inflation
Across the spectrum of income levels, the U.S. savings rate exploded during the pandemic
The robust consumer activity occurring now is, in part, a spending down of that excess savings that households accumulated during the pandemic
Supply-chain disruptions will continue to improve, or businesses will adjust accordingly, also helping to bring down the rate of inflation
As Fed efforts to slow down inflation continue, a “soft landing” where the economy shifts from growth to slow-growth to potentially flat, as it approaches but avoids recession, is still entirely possible
Worker labor force participation of 25-to-54-year-olds is essentially back to pre-pandemic levels
And 80 percent of the growth in labor force in 2021-22 was due to immigration
Dr. Altig emphasized several times that the views expressed were his own and are not necessarily those of the Atlanta Federal Reserve.
Dr. Altig also praised the greater Chattanooga regional efforts to improve workforce development.
“Shout out to all of the workforce development efforts that Chattanooga is very known for. There lies our future,” Dr. Altig said.
Read a recap of the Economic Outlook Breakfast here.
Learn about the Chattanooga Chamber’s economic development programs here.
Economic Outlook Breakfast – During the first quarter of each calendar year, the Chattanooga Chamber invites local business and community leaders to learn the latest national and regional economic trends and forecasts, as provided by renown expertise from the Federal Reserve Bank of Atlanta.
The Atlanta Federal Reserve – one of 12 regional banks nationwide comprising the Federal Reserve System– promotes consumer protection and community development through research and analysis of emerging consumer issues and trends, and community economic development activities. The Federal Reserve also works to activate underutilized financial, human, and social capital to help facilitate inclusive economic growth.
David E. Altig, Ph.D., is executive vice president and director of research at the Federal Reserve Bank of Atlanta, where he oversees the Research Division including the Bank's team of economists, the Regional Economic Information Network, and Community and Economic Development. In this role Dr. Altig leads the Atlanta Fed's research and engagement portfolio on benefits cliffs. He also serves as a member of the Bank's Executive Leadership Committee, Discount Committee, executive leadership team for Economic Mobility and Resilience, and as executive cosponsor of the Bank's Working Families Employee Resource Network. Prior to joining the Atlanta Federal Reserve, Dr. Altig served as vice president and associate director of research at the Federal Reserve Bank of Cleveland, where he started as a staff economist in 1991. He also serves as president of the National Association for Business Economics.