also discuss the labor market and the rise in inflation. then, i ’ ll describe how the federal reserve ’ s monetary policy is working to help restore balance and stability to the economy during these uncertain times. economic outlook since it ’ s the friday before a holiday weekend, i won ’ t test any of you on the functions of the federal reserve system. but i do want to take a moment to discuss the fed ’ s dual mandate of promoting maximum employment and price stability. u. s. monetary policy is set by the fomc, which is made up of the board of governors and five of the 12 presidents of the federal reserve banks. we make our decisions after studying the data — lots of data. we look at everything from food and gas prices to retail sales and inventories, from labor costs and employment figures to semiconductor inventories and shipping expenses, and from the demand for goods and services to readings on public health. and we consider more than just numbers on spreadsheets and charts. we also regularly hear 1 / 4 bis central bankers'speeches from business and community leaders who tell us firsthand what is happening in the economy. this occurs both through regular meetings with our boards of directors and advisory groups, as well as in ongoing discussions with local leaders. that is why it ’ s so important for me to make trips like this one — even virtually — so i can meet with leaders to hear their perspectives. for example, earlier today i spoke with officials at the port newark – elizabeth marine terminal about supply chains and logistics. and yesterday, i met with groups in north jersey who are working to bridge the gap in health outcomes and housing — two critically important issues that can affect economic mobility. despite the disruptions from covid - 19, the overall economy has shown remarkable strength and resilience over the past year. to put this in perspective, the onset of the pandemic in 2020 caused the sharpest u. s. economic contraction since world war ii. since then, we have seen a remarkable turnaround. the economy, measured by real gross domestic product, or gdp, grew about 5 - 1 / 2 percent over the course of last year, the fastest pace of growth since 1984. to get an idea how long ago that was, 1984 was the year i finished college. the labor market has also improved dramatically and is now very strong. over the past 12 months through january, the economy added over 6 - 1 / 2 million jobs. the unemployment rate has

, cities, and counties are facing severe liquidity constraints resulting from the increase in state and local government expenditures related to the covid - 19 pandemic and the decrease and delay of certain tax revenue. by ensuring the smooth functioning of this market, particularly in times of strain, the federal reserve is providing credit that will support families, businesses, and jobs in communities, large and small, across the economy. the immediate purpose of the municipal liquidity facility is to enhance the liquidity of the municipal securities market by increasing the availability of funding to eligible states, cities and counties through tax anticipation notes ( “ tans ” ), tax and revenue anticipation notes ( “ trans ” ), bond anticipation notes ( “ bans ” ), and other similar short - term notes from eligible issuers ( collectively, “ notes ” ). the eligible issuer ’ s proceeds from its notes sales can in turn be used to support its political subdivisions and instrumentalities, among other uses. this facility will provide a form of bridge financing to eligible issuers, and by addressing the cash management needs of eligible issuers, the facility will also encourage investors to once again engage in the municipal securities market. of course what i ’ ve just covered is not an exhaustive list. the federal reserve board has also announced a number of other programs designed to supply credit directly to households, businesses, and municipalities. these include : the paycheck protection program liquidity facility will bolster the effectiveness of the small business administration ’ s paycheck protection program by supplying liquidity to participating financial institutions through two - year loans backed by ppp loans as collateral. the main street lending program will enhance support for small and mid - sized businesses that were in good financial standing before the crisis by purchasing up to $ 600 billion in fouryear loans to small and mid - size businesses. the term asset - backed securities loan facility ( talf ) will support issuance of securities backed by student loans, auto loans, credit card loans, small business loans, and other debt. moving with maximum care considering the speed and scale of damage caused by the virus outbreak, we are making all efforts to implement these facilities at maximum speed. at the same time, though, we are moving with maximum care, drawing upon all of the lessons learned since 2008. first and foremost, we know that transparency will be key to sustaining public confidence in our efforts. what does this mean in practice? it means that when we work with outside vendors, we explain