Washington, (Asian independent) US Federal Reserve Chairman Jerome Powell said that the American economy is “not out of the woods yet”, particularly with a slower recovery for low-wage and minority workers.
“While the recovery is gathering strength, it has been slower for those in lower-paid jobs,” Powell said at a virtual event on Monday sponsored by the National Community Reinvestment Coalition.
“Almost 20 per cent of workers who were in the lowest earnings quartile in February of 2020 were not employed a year later, compared to 6 per cent for workers in the highest quartile,” he said.
The Fed’s latest Survey of Household Economic Decisionmaking (SHED), to be released later this month, will show that, “for prime-age adults without a bachelor’s degree, 20 per cent saw layoffs in 2020 versus 12 per cent for college-educated workers”, Xinhua news agency quoted Powell as saying.
“And more than 20 per cent of Black and Hispanic prime-age workers were laid off compared to 14 per cent of white workers over the same period,” he added.
Meanwhile, labour force participation declined around 4 percentage points for Black and Hispanic women compared to 1.6 percentage points for white women and about 2 percentage points for men overall, according to Powell.
“The economic downturn has not fallen evenly on all Americans, and those least able to bear the burden have been the hardest hit,” he said.
Powell noted that the Fed is focused on these “long-standing disparities” because they weigh on the productive capacity of US economy.
“Achieving broadly shared prosperity will take action from across society, from fiscal and other government policy to private-sector initiatives to the work everyone here does. The Fed can contribute as well,” he said.
The Fed has pledged to keep its benchmark interest rates unchanged at the record-low level of near zero, while continuing its asset purchase program at least at the current pace of $120 billion per month until the economic recovery makes “substantial further progress”.
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