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Home Economy

Powell: Broad Effort Needed for All to Benefit from Economic Recovery

May 3, 2021
Reading Time: 1 min read

The Federal Reserve is focused on addressing “long-standing disparities” in unemployment “because they weigh on the productive capacity of our economy,” Federal Reserve Chairman Jerome Powell said today during remarks at an industry event. “We will only reach our full potential when everyone can contribute to, and share in, the benefits of prosperity.” Achieving that goal “will take action from across society, from fiscal and other government policy to private-sector initiatives” to community development efforts, he added.

Powell highlighted new figures from the Fed’s latest Survey of Household Economics and Decisionmaking (due to be published later this month) that saw, for example, higher unemployment among prime-age workers without college degrees than those who were college-educated, as well as disparities in the number of Black and Hispanic workers that were laid off compared to white workers in 2020. Additionally, “while the recovery is gathering strength, it has been slower for those in lower-paid jobs: Almost 20 percent of workers who were in the lowest earnings quartile in February of 2020 were not employed a year later, compared to 6 percent for workers in the highest quartile,” he observed.

As the recovery moves forward, Powell said that the Fed will continue using its monetary policy tools to strengthen the economy and the employment outlook. The agency will also use its supervisory tools to ensure fair lending compliance, as well as engage with community development stakeholders to encourage investment and the expansion of credit opportunities in low- and moderate-income communities.

“Those who have historically been left behind stand the best chance of prospering in a strong economy with plentiful job opportunities,” Powell said. “Our recent history highlights both the benefits of a strong economy and the severe costs of a weak one.”

Tags: Community developmentCoronavirusCOVID-19Fair lendingFederal ReserveFinancial inclusionInterest ratesJob cuts
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