SAN FRANCISCO (Reuters) – U.S. Federal Reserve Chair Jerome Powell on Friday reiterated his pledge to do what he can to bring the U.S. labor market back to its pre-coronavirus strength, particularly given the pandemic’s fierce impact on the nation’s minorities and its poor.
Powell made the remarks in a report released on Friday detailing findings from 15 community outreach events the Fed held across the country over the past year, part of a review of its monetary policy framework that is still continuing.
“The Federal Reserve remains focused on its goals and on laying the foundation for a return to the strong labor market that we saw at the time of our 2019 Fed Listens conversations,” Powell said in the report.
All but one of the events from which the report drew were held before the coronavirus pandemic.
But even before the economy began collapsing amid widespread shutdowns to stem the spread of infection, participants in the events told Fed officials that the “tight” labor conditions many small businesses said were making hiring difficult had bypassed many Americans.
Then came the recession, which panelists told the Fed was hitting poorer people hardest and threatened to worsen existing inequality.
The Fed raised similar concerns in its monetary policy on Friday, telling Congress that employment is now roughly 35% lower for low-wage workers than before the crisis, compared with just 5% to 15% lower for higher-wage workers.
The report also noted most people’s lack of concern over low inflation, which Fed policymakers say gets in the way of using interest-rate policy to stimulate growth.
It is a germane point during the current recession, and as the Fed considers how to remake its monetary policy approach to help boost inflation: an important goal in the Fed’s view, but one that many people may simply see as blunting their buying power.
(Reporting by Ann Saphir; Editing by Andrea Ricci and Jonathan Oatis)