Karl W. Smith, Columnist

Now Fedspeak Is More Important Than Ever

What Powell says in the next few weeks, even more than what the Fed does, can do a lot to calm jittery markets.

December 7, 2018 at 4:16 PM UTC

Corrected

December 7, 2018 at 5:53 PM UTC

Karl W. Smith is a Bloomberg Opinion columnist. Previously, he was vice president for federal policy at the Tax Foundation and assistant professor of economics at the University of North Carolina.

Choosing his words carefully.
Photographer: Chip Somodevilla/Getty Images North America

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If you were already inclined to believe that the global slowdown in growth was beginning to hit the U.S., this week’s data shored up your argument. And the new information makes what Chairman Jerome Powell says at the Federal Reserve’s upcoming meeting almost as important as what the Fed does.

First, the numbers. It’s not just that job growth, at 155,000, was some 43,000 below the consensus forecast, and that there were also downward revisions for of the previous two months’ numbers. More disturbing is that the so-called underemployment rate, which includes workers who have only loose attachments to the workforce or have given up looking for a job, ticked up from 7.4 to 7.6 percent. (The economy had previously been doing a good job of drawing those workers into regular employment.)