Federal Reserve Board Governor Lael Brainard speaks at the John F. Kennedy School of Government at Harvard University in Cambridge, Massachusetts, USA, March 1, 2017.
Brian Snyder | Reuters
Unemployment for the lowest-paid workers in the United States exceeds 20%, a figure the Federal Reserve Governor, Lael Brainard, stressed the importance of political aid to the economy.
The figure indicates how uneven the recovery has been since efforts to control the Covid-19 pandemic led to the largest quarterly decline in GDP since the Great Depression.
“The damage caused by COVID-19 is concentrated among the groups already challenged,” Brainard said in a speech on Wednesday. “The K-shaped recovery remains very uneven, with certain sectors and groups
encountering substantial difficulties. “
At a time when the national unemployment rate has fallen from a pandemic of 14.7% to the current 6.7%, Fed economists estimate that the unemployment rate, the unemployment rate for the lowest quartile of people earning, is “probably over 20 percent, ”Brainard said.
This is because the black unemployment rate is 9.9% and the Hispanic rate is 9.3%, while the rate for whites is 6%.
Fed officials have made “inclusive” earnings a priority and adapted the policy to try to achieve this. A new approach will allow inflation to exceed the Fed’s target of 2%, and the unemployment rate to fall below what has traditionally been an indicator of higher inflation before the Fed raises interest rates.
In recent days, central bank spokesmen have offered somewhat different views on the future of policies, some worrying about rising inflation faster than expected.
Brainard did not commit to setting a time frame for policy adjustment, but noted that “the economy remains far from our goals.”
“We are firmly committed to achieving our maximum employment and average inflation targets,” she said. “It is too early to say how long it will take. The committee has made it clear that it needs to see substantial progress towards our targets before adjusting procurement.”
The Fed buys bonds of at least $ 120 billion each month and has kept its short-term benchmark loan rate close to zero. Fed officials continued to ask Congress for more tax aid.