Federal Reserve Speeches·Apr 7, 2026, 5:50 PM ET

Jefferson, Economic Outlook and the Labor Market

The speaker, a former economics professor & current Federal Reserve Board Governor, outlined an economic outlook focused on U.S. growth, labor markets, monetary policy, & the Southeast Michigan region.
U.S. GDP is projected to grow at a rate similar to or slightly faster than last year's 2 percent expansion, driven by resilient consumer spending, business investment, AI infrastructure, & deregulation.
Inflation remains above the 2 percent target for five years, with recent progress stalled due to tariffs & elevated energy prices, though core housing inflation has declined.
The labor market is described as roughly in balance with a "low-hire, low-fire" dynamic, where unemployment has stabilized near 4.3 percent in March after cooling in 2025.
Recent job growth has been uneven but averages about 70,000 jobs per month in the first quarter, a pace considered sufficient to maintain steady unemployment given slowed labor force growth.
Monetary policy is currently set to hold the federal funds rate steady, positioning the economy in a neutral range to support employment while allowing inflation to decline toward the 2 percent target.
Detroit's economy has diversified significantly, with health care & social service employment rising nearly 40 percent over 25 years while manufacturing jobs have decreased.
The unemployment gap between Detroit & the national average has narrowed, & the region shows signs of stabilization despite vulnerabilities linked to the automotive industry & global trade.
Key risks to the outlook include geopolitical tensions in the Middle East, potential disruptions from elevated energy prices, & ongoing trade policy uncertainty.
The speaker expressed caution regarding the economic forecast but affirmed that the current policy stance is well-positioned to respond to evolving data & risks.