Federal Reserve Chair Jerome Powell expressed what many on the conservative side have been warning about when he pinned the cause of the nation's rising unemployment rate on the unprecedented numbers of illegal migrants entering the United States.
Earlier on Wednesday, Powell announced the agency was cutting interest rates by half of a percentage point in an effort to give much needed relief to borrowers. When asked by a reporter about the nation's currently dismal job creation numbers, he responded, "If you're having millions of people come into the labor force — and you're creating 100,000 jobs — you're going to see unemployment go up."
Unemployment currently sits at 4.2%, which is up from 3.4% in April of 2023. While inflation has eased in the last several months, overall prices of consumer goods remain up more than 20% since President Joe Biden took office in January 2021.
"So, it really depends on what's the trend underlying the volatility of people coming into the country," Powell said. "We understand there's been quite an influx across the borders, and that has actually been one of the things that's allowed the unemployment to rise. And the other thing is just the slower hiring rate, which is something we also watch carefully. So, it does depend on what's happening on the supply side."
In July, there were 89,000 jobs added, the lowest figure in the U.S. since the COVID-19 lockdowns of 2020. Many economic experts see the interest rate cut as a hedge against the rising unemployment rate and a necessary move to maintain a stable economy.
US Customers and Border Protection data indicate more than 7 million illegal border crossers have been apprehended on the southern border during the Biden administration.
James Morley III ✉
James Morley III is a writer with more than two decades of experience in entertainment, travel, technology, and science and nature.
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