The pace of change in the economy has increased the risks that workers' skills will become obsolete, and they will lose their long-held jobs...This increased rate at which experienced workers have been losing long-held jobs is one of the factors that monetary policy makers have to think about in judging the extent of inflationary pressures currently facing the economy.

An important reason that the U.S. economy is dynamic and productive, and generates a higher standard of living for us all, is that we embrace change. Now there will be people who suffer from such changes. But because these losses are part of the dynamic process that makes us all better off, society can and should help these people find their place in the new workforce.

Given the GDP has been so close to expectation, the slightly slower-than-expected job growth is just the flip side of the somewhat greater-than-anticipated productivity growth.

[A] critical long-run economic challenge facing the United States is the need to ensure that our workforce is equipped with the requisite skills to compete effectively in an environment of rapid technological progress and global competition...Demand for the least-skilled workers in the United States and other developed countries is diminishing, placing downward pressure on their wages.  These workers will need to acquire the skills required to compete effectively for the new jobs that our economy will create.

As you know productivity in manufacturing has really been very impressive. The downside, obviously, is it's made - created fewer job opportunities. And we can reasonably assume that the economy is going forward at a fairly good clip and that, therefore, the demand for manufactured goods will continue reasonably significant. But it depends on productivity growth, or I should say the extent to which manufacturing jobs changes one way or the other depends on whether productivity growth goes up or slows down.

Looking ahead, productivity growth is likely to remain relatively strong as technology continues to become cheaper and more powerful — but it is not likely to be as strong as it has been over the past few years. That is why I expect demand growth to generate steadier employment gains going forward.  

We have what has been called a “jobless recovery” — net employment growth has been relatively subdued coming out of this business cycle trough. Arithmetically this can only happen with an increase in productivity, so in this sense the jobless recovery reflects strong productivity growth.

While import growth does not appear to have been the driving force in labor market developments for the U.S. economy as a whole, it’s certainly the case that some industries and some regions have been affected quite significantly by trade.

Whether trade or technology is the major force, the message is the same. The world has become a much more challenging place for workers with lower skills and workers whose skills are largely specific to their job or industry. The weight of empirical evidence strongly suggests that erecting barriers to trade would ultimately prove a counterproductive response to this phenomenon.

There is a fundamental congruence between the effects of trade and technology on labor market outcomes. Both can displace workers and force them to make the transition to other sectors. But both ultimately elevate standards of living. Few seriously propose impeding technological progress for the sake of jobs. We should be equally hesitant to impede trade.

Adaptability will be increasingly important in the years ahead.  A worker can no longer count on an initial occupation to maintain its relative position over time.

I have argued that trade-related job losses are fundamentally no different from job losses arising out of the ongoing turbulence of technological change. It’s hard to see why one set of transitioning workers should be singled out for favorable treatment, except perhaps to reduce political opposition to trade liberalization.

... I expect them to continue increasing at a rate of 150,000 to 200,000 jobs per month this year. With those kinds of employment gains, the unemployment rate should continue its gradual decline.

Spells of unemployment remain stubbornly high for an expansion that is in its fourth year. Yet, I continue to hear anecdotes about skilled labor being expensive and hard to find. So the labor market presents a puzzle.

The pace of private sector hiring has been relatively modest, and growth in household disposable income—a major factor determining consumption—relatively muted. This raises a question about whether the consumption spending that is needed to support GDP growth at its current pace is achievable without a pick up in hiring and/or wages.