Economic challenges remain, Powell says

WASHINGTON — United States Federal Reserve Chairman Jerome Powell said Monday that despite solid economic progress, the country still faces a number of challenges ranging from slow wage growth for lower-income workers to sluggish productivity and an aging population.

Powell said in remarks at a Fed award ceremony that these challenges remain even though unemployment is near five-decade low and the financial system has been bolstered since the 2008 financial crisis.

While there have been recent gains in wage growth, Powell said that wages for lower-income workers have grown quite slowly over the past few decades.

He also noted that a decades-long decline in economic mobility has made it more difficult for lower-income Americans to move up the economic ladder.

In his remarks, Powell praised the work of the Fed’s community development staff and former Fed Chair Janet Yellen, who put a special emphasis on efforts to help disadvantaged communities during her 16 years at the Fed, including the last four as Fed chair.

Powell did not discuss the Fed’s current interestrate policies in his appearance.

The central bank has raised rates three times this year and is expected to boost rates for a fourth time later this month. Powell sent the stock market surging last week when he signalled that the Fed may decide to slow the pace of rate hikes next year.

Investors had been hoping to learn more about Powell’s current thinking in testimony he was scheduled to deliver Wednesday before the congressional Joint Economic Committee. However, that appearance was cancelled because of the government closure for the funeral of former President George H.W. Bush.