lael brainard : us economic outlook and monetary policy - an update speech ( via webcast ) by ms lael brainard, member of the board of governors of the federal reserve system, at the c. peter mccolough series on international economics, council on foreign relations, new york city, 2 march 2021. * * * it has been one year since the first wave of the covid - 19 pandemic hit our shores — a year marked by heartbreak and hardship. we are all looking forward to a brighter time ahead, when vaccinations are widespread, the recovery is broad based and inclusive, and services, schools, sports, and social life are in person. the expected path of the u. s. economy has strengthened with the prospect of widespread vaccinations and additional fiscal stimulus, but risks remain, and we are currently far from our goals. 1 current situation after a dark winter with elevated case counts and setbacks on service - sector jobs, case counts have come down and spending is picking up. economic forecasts for growth during the first quarter have been significantly upgraded in response to the better - than - expected data. 2 january data for household spending overall came in strong — confirming that the renewal of fiscal support at the end of the year provided a much needed boost to household incomes and spending at the turn of the year. the income support provided by fiscal authorities to hard - hit workers, households, businesses, and states and localities, as well as the actions of the federal reserve to promote orderly functioning in financial markets and low borrowing costs for households and businesses, have been providing vital support for the economy. in recent weeks, vaccinations have been increasing, while weekly cases, hospitalizations, and deaths have decreased. the seven - day moving average of daily covid deaths, which peaked in mid - january, declined about 35 percent during the month of february, although sadly it is still at high levels. 3 as of yesterday, nearly 77 million vaccination doses had been administered. while the progress on vaccinations is promising, jobs are currently down by 10 million relative to pre - pandemic levels. improvements in the labor market stalled late last year after rebounding partway in the summer and fall of 2020. when we take into consideration the more than 4 million workers who have left the labor force since the pandemic started, as well as misclassification errors, the unemployment rate is close to 10 percent currently — much

the precovid level, and inflation has been running below 2 percent for years. we will need to be patient to achieve the outcomes set out in our guidance. 1 i am grateful to kurt lewis for assistance in preparing these remarks. these remarks represent my own views, which do not necessarily represent those of the federal reserve board or the federal open market committee. 2 see, for example, the federal reserve bank of atlanta ’ s gdpnow, which revised up the estimate for first - quarter growth by 5 percentage points on the release of the retail sales data. the latest estimate is 8. 8 percent. the gdpnow forecast is available on the federal reserve bank of atlanta ’ s website at www. frbatlanta. org / cqer / research / gdpnow. 3 for more information, see the centers for disease control and prevention ’ s covid data page, which is available at covid. cdc. gov / covid - data - tracker. 4 see the lower panel of figure 3 in lael brainard ( 2021 ), " how should we think about full employment in the federal reserve ’ s dual mandate? " speech delivered at the ec10, principles of economics, lecture, faculty of arts and sciences, harvard university, cambridge, mass. ( via webcast ), february 24. 5 the percentages are staff calculations based on the microdata from the january current population survey. for more information on this analysis, see the box “ disparities in job loss during the pandemic ” in board of governors of the federal reserve system ( 2021 ), monetary policy report ( pdf ) ( washington : board of governors, february ), pp. 12 – 14. 6 see olivia lofton, nicolas petrosky - nadeau, and lily seitelman ( 2021 ), " parents in a pandemic labor market, " working paper 2021 – 04 ( san francisco : federal reserve bank of san francisco, february ) ; and lael brainard ( 2020 ), " achieving a broad - based and inclusive recovery, " speech delivered at “ post - covid — policy challenges for the global economy, ” society of professional economists annual online conference, october 21. 7 for more information on the analysis on employment by wage quartile, see the box “ disparities in job loss during the pandemic ” in board of governors, monetary policy report, in note 5. 8 for examples of the range of estimates of the effects of the