Federal Reserve Board Governor Lael Brainard speaks at Harvard University’s John F. Kennedy School of Government in Cambridge, Massachusetts, USA on March 1, 2017.
Brian Snyder | Reuters
Unemployment among the worst paid workers in the United States is over 20%. This number, according to Federal Reserve Governor Lael Brainard, underscores the importance of political aid to the economy.
The figure shows how uneven the recovery has been since efforts to fight the Covid-19 pandemic resulted in the largest quarterly GDP decline since the Great Depression.
“The damage from COVID-19 is focused on groups already challenged,” Brainard said in a speech on Wednesday. “The K-shaped recovery is still very uneven and certain sectors and groups are experiencing significant difficulties.”
At a time when the national unemployment rate has fallen from a pandemic peak of 14.7% to its current level of 6.7%, Fed economists estimate the unemployment rate for the lowest quartile of the workforce at “probably above 20%,” Brainard said.
The unemployment rate for blacks is 9.9%, that of Hispanics is 9.3%, while the rate for whites is 6%.
Fed officials have prioritized “inclusive” job growth and adjusted policies to achieve this. A new approach will allow inflation to be above the central bank’s 2% target and the unemployment rate to fall below the higher inflation indicator before the Fed raises interest rates.
Over the past few days, central bank spokesmen have expressed slightly different views on the future of policy, with some feared that inflation will rise faster than expected.
Brainard did not commit to a timeframe for policy adjustments, but stated that “the economy is far from our goals”.
“We are determined to meet our goals for maximum employment and average inflation,” she said. “It is too early to say how long it will take. The committee has made it clear that significant further progress needs to be made towards our objectives before adjusting the purchases.”
The Fed is currently buying at least $ 120 billion worth of bonds every month and has kept its benchmark short-term borrowing rate near zero. Fed officials continued to seek more fiscal aid from Congress.