Across data that go back to 1972, however, Black unemployment in the best of times is not much better than white unemployment in the worst of times. That population includes an increasing number of baby boomers near retirement or already retired. Thus, some of the difference between their employment rate at the start of the recession and its rate more than a decade later reflected demographic trends rather than labor market weakness. In contrast, the employment-to-population ratio for those in their prime working years (age 25-54), which fell 4. 9 percentage points between the start of the recession and December 2009, recovered all of that loss and was 80. 5 percent in February 2020.
Nevertheless, it remained below the peak rates achieved in the 1990s expansion, fell to a recent low of 69. 7 percent in April, and was 76. 0 percent in Novemberr. The employment-to-population ratio of those aged 16 and older remained near its recession low until 2014, when it began to rise as labor force participation leveled off while unemployment continued to fall. Nevertheless, in February 2020 it was still 1. 6 percentage points below its rate at the start of the recession.
As the 2009 Recovery Act’s temporary fiscal stimulus measures expired, the primary responsibility for nurturing the economic recovery fell to the Federal Reserve. The Fed has a “dual mandate” from Congress to pursue stable prices and “maximum employment. ” It does so primarily by cutting interest rates to stimulate economic activity in a weak economy and raising interest rates to restrain economic activity in an overheating economy.
The rise in unemployment since February 2020, however, pushed the unemployment rate well above the 10. 8 percent rate reached in late 1982, which itself was the highest since the 1930s. It has been a still-high 6. nine percent in October, yet the Bureau of Work Statistics says the real rate likely is somewhat higher due to misclassification of some workers. Personal employment rose by 344, 000 job in November yet remains 8. 5 mil below its February degree.
It fell in March and again in April to its lowest rate on record of 51. 3 percent. After rising from May through October to 57. 4 percent, it edged down in November to 57. 3 percent. The Fed began to lower its target for the federal funds rate in 2008 as the economy began to weaken, and it continued to cut rates as the financial crisis worsened and unemployment rose, until the federal funds rate was effectively zero by the end of 2008. It does, however, periodically publishprojectionsby the members of its monetary-policymaking committee of what they expect the unemployment rate to be in the longer run under their policies. As unemployment fell below those projections while inflation remained below target, the committee members revised down their long-term unemployment rate projections. The last median projection before COVID-19 was 4. 1 percent, although actual unemployment was 3. 5 percent in February. Now, of course, the unemployment rate has surged well above those long-term projections.