Heather Boushey has her official Commissioned Officer portrait taken, Tuesday, December 7, 2021, in … [+]
As our economy continues to recover from the Covid-19 pandemic, greater focus has been paid on the Federal Reserve System. The Fed is tasked with maximizing employment, stabilizing prices, and maintaining interest rates, making it critical to our overall growth in the years to come.
There are currently several positions on the Federal Reserve Board of Governors that need to be filled. As the Senate considers these nominees, it is important to understand what an important role they play in shaping the economy and what that means for small businesses, who create half of our nation’s jobs. In fact, small business leaders have sent a letter of support to the U.S. Senate Banking Committee leadership in advance of their confirmation vote on February 15 calling for quick confirmation.
As a member of the Council of Economic Advisers, Heather Boushey advises the President and the Administration on economic policy. I recently had the opportunity to speak with her about the Federal Reserve and the importance of confirming these nominees. I am grateful for her taking the time and below is a summary of our conversation.
Rhett Buttle: In general, how are you feeling about the current state of our economic recovery from the pandemic, specifically how it relates to small business?
Health Boushey: With economic growth faster than any year since 1984 and unemployment at 4%, the economy has rebounded from the recession, thanks to the policies of this Administration. The January jobs report is a testament to our strong recovery; the 467,000 jobs added this month came in well above market expectations and the labor force participation rate reached a new pandemic-high of 62.2%. Alongside this overall economic strength, many small businesses have been able to make a remarkable—and swift—recovery.
We can see this in the data. In 2021, new small business applications surged. Small business applications that the Census Bureau believes will become a firm with a payroll—what are called “high propensity” applications—are up nearly 35% from their January 2020 level. Further, establishments with fewer than 50 people have been adding jobs to the economy since the third quarter of 2020 (including roughly 750,000 for the fourth quarter of 2021, the period with most recent data).
Rhett Buttle: How does the Federal Reserve’s work directly impact the private sector, small businesses, and Main Street?
Heather Boushey: The Federal Reserve’s policy making touches every part of …….