and labor force participation had increased. - 5full - time jobs. 9 the gains in employment may have come sooner and been greater if the new monetary policy framework had been in place throughout the previous recovery. the new policy approach, by avoiding the need to tighten preemptively, could support labor market conditions that help to reduce persistent disparities. this could, in turn, boost activity and increase potential growth by drawing individuals from groups facing structural challenges into more productive employment. 10 research and experience suggest the groups that face the greatest structural challenges in the labor market are likely to be the first to experience layoffs during downturns and the last to experience employment gains during recoveries. 11 at the october 2019 fed listens event, amanda cage, who now heads the national fund for workforce solutions, observed, “ what we see is huge disparities in what unemployment looks like for neighborhoods. ” 12 she highlighted the challenges facing those communities where unemployment remains at or above 15 percent even when unemployment falls below 4 percent at the national level. these numbers are based on the observed changes in various aggregate labor market statistics between the fourth quarter of 2015 and the fourth quarter of 2019 — the last quarter unaffected by the covid - 19 pandemic. for a discussion of how structural disparities can lead to household underinvestment in areas such as education and business endeavors, see lael brainard ( 2017 ), “ labor market disparities and economic performance, ” remarks at “ banking and the economy : a forum for minority bankers, ” a conference hosted by the federal reserve bank of kansas city, kansas city, mo., september 27, https : / / www. federalreserve. gov / newsevents / speech / brainard20170927a. htm. research finds that both unemployment rates and patterns of labor force entry and exit for black and hispanic workers are more cyclically sensitive than for white workers. see tomaz cajner, tyler radler, david ratner, and ivan vidangos ( 2017 ), “ racial gaps in labor market outcomes in the last four decades and over the business cycle, ” finance and economics discussion series 2017 - 071 ( washington : board of governors of the federal reserve system, june ), https : / / doi. org / 10. 17016 / feds. 2017. 071. see david wessel, amanda cage, victor dickson, russell kavalhuna, and robert

” speech delivered at “ how the fed will respond to the covid - 19 recession in an era of low rates and low inflation, ” an event hosted by the hutchins center on fiscal and monetary policy at the brookings institution, washington, september 1, https : / / www. federalreserve. gov / newsevents / speech / brainard20200901a. htm. - 3employment in either direction, monetary policy will now seek to eliminate shortfalls from maximum employment. in other words, the new framework calls for policy to address employment when it falls short of its maximum level, whereas the previous framework called for policy to react when employment was judged to be too high as well as too low. the new monetary policy framework also eliminates the previous reference to a numerical estimate of the longer - run normal unemployment rate and instead defines the maximum level of employment as a broad - based and inclusive goal for which a wide range of indicators are relevant. additional changes address the persistence of below - target inflation and the decline in the equilibrium interest rate. research and experience indicate that persistent low equilibrium interest rates increase the frequency and duration of periods when the policy rate is pinned close to zero, unemployment is elevated, and inflation is below target. 6 as a result, actual inflation and inflation expectations will tend to be biased below the 2 percent target, further eroding policy space and exacerbating the effects of the lower bound, risking a downward spiral for actual and expected inflation. from the time of the federal open market committee ’ s ( fomc ) announcement of a 2 percent inflation objective in january 2012 through the most recent data in november, monthly readings of 12 - month personal consumption expenditure ( pce ) inflation have averaged 1. 4 percent and have been below 2 percent in 95 out of the 107 months. see kathryn holston, thomas laubach, and john c. williams ( 2016 ), “ measuring the natural rate of interest : international trends and determinants, ” working paper series 2016 - 11 ( san francisco : federal reserve bank of san francisco, december ), http : / / www. frbsf. org / economicresearch / publications / working - papers / wp2016 - 11. pdf ; and lael brainard ( 2015 ), “ normalizing monetary policy when the neutral interest rate is low, ” speech delivered at the stanford institute for economic policy research, stanford, calif., december