Yellen says job mar­ket strong for new grads

The Denver Post - - BUSINESS - By Christo­pher Con­don and Jeanna Smi­alek

Fed­eral Re­serve Chair Janet Yellen said eco­nomic gains are fi­nally rais­ing liv­ing stan­dards for most Amer­i­cans as a healthy la­bor mar­ket con­trib­utes to higher wages.

“Af­ter years of a slow eco­nomic re­cov­ery, you are en­ter­ing the strong­est job mar­ket in nearly a decade,” Yellen told a class of grad­u­at­ing stu­dents at the Univer­sity of Bal­ti­more on Mon­day, ac­cord­ing to the text of her com­mence­ment ad­dress. “There are also in­di­ca­tions that wage growth is pick­ing up, and weekly earn­ings for younger work­ers have made strong gains over the past cou­ple of years.”

Her speech came less than a week af­ter Fed pol­icy mak­ers sig­naled grow­ing con­fi­dence in the U.S. econ­omy by rais­ing the cen­tral bank’s bench­mark lend­ing rate by a quar­ter per­cent­age point and in­creas­ing the num­ber of sim­i­larly sized hikes they ex­pect in 2017 to three from two. Yellen lauded a strong la­bor mar­ket and said de­grees will help young peo­ple take ad­van­tage of the op­por­tu­ni­ties the mod­ern world presents.

“While glob­al­iza­tion will likely con­tinue and tech­nol­ogy will con­tinue to ad­vance, we don’t know how fast the econ­omy will grow, what new tech­nolo­gies will be de­vel­oped, or how quickly and con­sis­tently em­ploy­ment will ex­pand,” Yellen said. “Suc­cess will con­tinue to be tied to ed­u­ca­tion, in part be­cause a good ed­u­ca­tion en­hances one’s abil­ity to adapt to a chang­ing econ­omy.”

The job­less rate for those with a bach­e­lor’s de­gree or higher is down to 2.3 per­cent, the lowest since 2008. While over­all un­em­ploy­ment in the U.S. is twice that, at 4.6 per­cent, it’s at its lowest level in more than nine years.

“This is a level that has been as­so­ci­ated with good job op­por­tu­ni­ties,” Yellen said.

Fed of­fi­cials said last week they ex­pect the job­less rate will only de­crease slightly over the next three years. Some mem­bers of the Fed­eral Open Mar­ket Com­mit­tee, how­ever, have ad­vo­cated a quicker pace of rate in­creases out of con­cern that the Fed risks spark­ing higher in­fla­tion if un­em­ploy­ment is pushed too low.

Head­line in­fla­tion stands at 1.4 per­cent, well be­low the Fed’s 2 per­cent goal. Core in­fla­tion, which strips out volatile fuel and food, is at 1.7 per­cent — higher, but still not where the Fed wants it.

The school where Yellen spoke, the Univer­sity of Bal­ti­more, is part of Mary­land’s pub­lic univer­sity sys­tem. The ma­jor­ity of its stu­dents are from ra­cial mi­nor­ity pop­u­la­tions and 42 per­cent are black, ac­cord­ing to the school’s web­site.

The Fed has come un­der pres­sure in re­cent years to help in­crease mi­nor­ity em­ploy­ment by keep­ing in­ter­est rates lower longer, and has also been crit­i­cized for a lack of di­ver­sity in its lead­er­ship.

“The de­grees you have worked so hard to earn and the op­por­tu­ni­ties now open­ing up to you rep­re­sent the stub­born, earnest hope that any­one and ev­ery­one who strives to suc­ceed still can suc­ceed,” Yellen said.

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