Does the new Fed chair care about jobs?

In June, the U.S. economy added 57,000 jobs and the unemployment rate held steady at 4.2 percent. But the monthly jobs report landed in an unusual context: it was the first under new Federal Reserve Chair Kevin Warsh, who had just presided over his initial interest rate decision and press conference. Observers noticed something striking about that debut. Warsh talked repeatedly about price stability. He said almost nothing about maximum employment. That silence raises a pointed question for a central bank with a rare dual mandate: does the new Fed chair care about jobs?

The rarity of the dual mandate

The Federal Reserve is legally required to pursue two goals: stable prices and maximum employment. Congress gave the Fed this dual mandate in the late 1970s, a change that emerged from the civil rights era. Coretta Scott King was among the leaders who pushed for the legislation, arguing that economic opportunity was inseparable from the broader fight for justice. The structure is unusual globally. The European Central Bank, the Bank of Japan, and the Swiss National Bank all have mandates focused on price stability alone. The Bank of England adds financial stability. Only the Reserve Bank of Australia shares the Fed's two-goal structure. The dual mandate is rare, and it is also difficult.

Why maximum employment is hard to define and harder to deliver