Press conference exchange between CHRISTOPHER RUGABER and Fed Chair Jerome Powell:

user: Thanks. Can you—since you suggested that the concern from the pandemic is perhaps a shorter-term concern and that’s why you removed some of the language from the statement, can you talk about what impact you’re seeing so far? Do you feel that structural impacts have been—how would you characterize those? I know that’s been a major concern—you’ve talked about at this press conference and others. Do we see longer-term damage to the job market? Have—or has there been some success in preventing that? And, compared to previous recessions, how would you characterize the damage to the job market here, in terms of things like, you know, permanent job loss, workers that need to shift industries, that thing?

assistant: You know, the, the, the big thing is that the jury’s out. And this has been a concern since the very beginning, is the concern that people—if, if they become disconnected from the industry or the job where—that they used to work in, it, it can be years or never when they get back into the labor force, particularly for people who are well along in their careers—the same scarring for small businesses, which don’t have the resources that you need to get through this. So we’ve, we’ve had a big concern about, about both of those. We haven’t seen as much of it as we—as we feared. And that’s a good thing. But as I said that, you know, the jury is out here—9 or 10 million people still out of work because of the pandemic. They’re—a big chunk of them are people who worked in public-facing jobs in the service sector. And, you know, they’ve gotten a lot of support from fiscal policy and some from monetary policy. But the question is getting them back to work. And, you know, it’s, it’s harder if you’re—it takes longer, empirically, to find that next job if you’re looking at a brand-new industry. It’s not easy to change careers completely midcareer. So that just, again, stresses the urgency that we feel and others feel at, at, you know, fully defeating the pandemic, finishing the job and getting back to a place where it’s safe to have these—you know, to, to, to stay in hotels, to fly on airplanes, to go to sporting events and movie theaters, and all of those things. So those people are still at risk. And we’re, we’re very, very focused on that group of people with our policy and, and, and, you know, the way we look at the economy. So many people have had that bridge across the pandemic. You know, we talked about that at the beginning. For many people, it’s clear that they’ve made it across, and their job is okay, and their house is okay. And, you know, it’s been terribly inconvenient and painful, and schools are closed and things like that. But there, there’s a bunch of people yet who haven’t found that bridge yet. And we’re, we’re very focused on that. Of course, the other thing is, we’re going to a different economy. And we’re going to be learning more about that as we go. But, clearly, we’re, we’re learning that things can be done from remote locations. We’re learning that technology can replace people even more than we thought. And some of that is happening. So I think as we, you know, as we get into this, you know, the phase after—even after the economy fully reopens, I think we’re still going to need to keep people in mind whose lives have been disrupted, because they’ve lost that—the work that they did. And I think it would be wise as a country, for the longer-run productive capacity of the country, if we were to look out for those people and help them find their way back into the labor force even if it means continuing support for an additional period of time.

user: Great. If I could ask this quick follow—yesterday Susan Rice, domestic policy advisor at the White House, talked about a Citigroup study that said closing racial economic gaps could add up to $5 trillion to the U.S. economy over the next five years and 6 million new jobs. Do you agree that racial disparities are currently a drag on the economy? And, if so, what can the Fed do proactively to narrow those racial gaps in income and wealth, including potentially through regulatory policy?

assistant: I strongly agree with that, as a matter of fact. I think if you look at either—look at employment gaps or unemployment gaps or wage gaps, wealth gaps, homeowning gaps, all of those persistent gaps that exist even controlling for many other factors, you will see that they’re, they’re persistent, they’re—and they’re very difficult to explain. And so it’s—the reason we talk about inequality and, and racial inequality in particular, is that it goes to our job, which is to achieve maximum employment, which, which links up with, with—we want—we want the potential output of the United States to be as high as it can possibly be. We want—we want an economy where everybody can take part and everybody, everybody can put their labor in, and they can share in the prosperity of our great economy. That’s what we want. And that’s how the U.S. economy can be bigger, stronger, growing faster, is if we can achieve a more—a broader prosperity. So, now, in terms of our tools, you know, of course, that project that I just mentioned is one for the broader society, for the private sector, for fiscal policy, but we have a role to play. And, and that is, how we think about the labor market. Principally, when we say that the maximum employment is a, a broad and inclusive goal, what we’re—what we’re saying there is, we’re not just going to look at the headline—and we never did, really, but—we’re not going to just look at the headline numbers. We’re going to look at different demographic groups, including women, minorities, and others. And we’re not going to say that we’ve reached maximum employment, which is our statutory goal, until we’ve reached maximum employment. And you haven’t if, if there’s lots of pockets of, of people not participating in or not employed in the labor market. So those are the things that we can do. We also do a tremendous amount of research on these issues. You know, we do—we, we have such a focus on these issues now that we actually—we, we have a new, a webpage, relatively new, where you can access all of it. But it’s a lot of activities in our Division of Consumer and Community Affairs. It’s lots of research, and, and it’s also, you know, our enforcement of the fair lending laws and things like that. So I think everybody’s got a role to play here. It’s a—it’s a national goal and a national job, and we’re just going to do our part of the job. And it’s something we’re strongly committed to.