The path of the U.S. economy will continue to depend on the course of the coronavirus and progress in vaccination, according to members of the Federal Open Market Committee. In minutes from the group’s Jan. 26-27 meeting, members noted that the ongoing health crisis continues to weigh on economic activity, employment and inflation and poses considerable risk to the economic outlook.
Members noted that the resurgence in COVID-19 infection and social-distancing measures are restraining the activity of some sectors, especially travel, leisure and hospitality. They added that progress on vaccination is essential for gains in consumer spending and economic recovery.
The downturn has fallen the hardest on those lease able to shoulder the burden, members noted; in particular, low-income Black and Hispanic households. Sustained support from fiscal policy would help the hardships faced by those groups, members said.
Despite labor market conditions improving significantly since the spring, it was noted that if the number of workers who reported having left the labor force since the start of the pandemic were counted as unemployed, the unemployment rate would be substantially higher.