Virus poses lasting harm to U.S. economy, Powell says
An unprecedented economic downturn is falling on the most vulnerable Americans, Federal Reserve Chairman Jerome Powell and Fed Governor Lael Brainard said Thursday.
“While the burden is widespread, it is not evenly spread,” Powell said in prepared remarks for a live-streamed, community event. “Those taking the brunt of the fallout are those least able to bear it.”
The so-called Fed Listens session is one of many the Fed has staged in person around the country over the past year in cities such as Richmond and Cincinnati. The central bank has aimed to discuss its price stability and maximum employment goals with small businesses, labor leaders and non-profit organizations, and to get feedback from them on its policy strategy.
Thursday’s event occurs against a backdrop that’s starkly different from previous meetings. The unemployment rate soared to 14.7 per cent in April from 3.6 per cent the same month a year earlier as the coronavirus shutdown has thrown millions out of work.Fed officials have been noting that the losses are skewed toward vulnerable populations, reversing hard-fought gains that took a decade to achieve.The unemployment rate for high school graduates with no college education, for example, stood at 17.3 per cent last month. For African-Americans it was 16.7 per cent.
“The fallout from the COVID pandemic has cruelly hit groups with thinner financial cushions the hardest — workers in the lowest quarter of earnings, people of color, low and moderate income communities, and women disproportionately employed in services jobs,” Brainard said in her opening remarks for the event.