Never start a story with the words “Federal Reserve,” an editor once told me. Sage advice. But please stick around because there’s something extraordinary afoot.
You’ll recall that the U.S. Federal Reserve has two mandates: Stabilize prices (i.e., manage inflation) and maximize employment. But Trump-appointed Fed Chairman Jerome Powell is breaking with his predecessors by redefining what “full employment” really means. He’s established new, inclusive benchmarks for success.
The “Powell Dashboard,” as Bloomberg’s Matthew Boesler calls it, tracks progress among the most vulnerable sections of the workforce. Specifically, the Fed is watching Black unemployment, wage growth for low-wage workers, and labor force participation for those without college degrees. These are often the last indicators to rebound after an economic downturn. For example, the broad U.S. unemployment rate has fallen to 6.2%, but Mr. Powell is focused on the Black unemployment rate, stalled at 9.9%, as of Friday. “We have a lot of ground left to cover,” he told The Wall Street Journal last week.
Some economists argue that with a $1.9 trillion stimulus package (passed by the House today) about to surge through the U.S. economy, the Fed should focus on the inflation threat. But Mr. Powell isn’t budging. The Fed chair insists that for the first time “full” U.S. employment includes women and people of color. That’s a new and noteworthy standard of economic equality.