Unemployment rate is over 20% for lowest-paid workers, Fed Brainard says

Unemployment among the lowest-paid workers in the United States is over 20%, a figure which Federal Reserve Governor Lael Brainard said underscores the importance of political aid to the economy.

The figure shows how uneven the recovery has been since efforts to control the Covid-19 pandemic resulted in the largest quarterly decline in GDP since the Great Depression.

“The damage from COVID-19 is concentrated among already contested groups,” Brainard said in a speech Wednesday. “The K-shaped recovery remains very uneven, some sectors and groups
experience considerable difficulty. “

At a time when the national unemployment rate has fallen from the pandemic peak of 14.7% to the current 6.7%, Fed economists estimate that the unemployment rate, the unemployment rate of the lowest quartile of employees, is “probably over 20%,” Brainard said.

This comes from the fact that the unemployment rate for blacks is 9.9% and the Hispanic rate is 9.3% while the rate for whites is 6%.

Fed officials have made “inclusive” employment gains a priority and adjusted their policies to try to achieve it. A new approach will allow inflation to exceed the Fed’s 2% target and the unemployment rate to fall below what was traditionally an indicator of higher inflation before the Fed hiked rates. ‘interest.

In recent days, central bank speakers have presented somewhat different views on the future of politics, with some worrying about the faster than expected rise in inflation.

Brainard did not commit to setting a timeframe for the policy adjustments but noted that “the economy remains far from our targets.”

“We are firmly committed to achieving our targets for maximum employment and average inflation,” she said. “It is too early to say how long this will take. The Committee has made it clear that it needs to see further substantial progress towards our goals before adjusting procurement.”

The current Fed buys at least $ 120 billion in bonds each month and has kept its benchmark short-term borrowing rate anchored near zero. Fed officials have continued to ask Congress for more budget support.