As investors wanted an increase in growth and slightly faster price increases, the Federal Reserve began to expect viewers to be able to slow down its large bond purchases, which it used to boost growth, and raise interest rates than before. . was expected.
The central bank has promised to leave interest rates close to zero until the economy reaches full employment and inflation is above 2 percent and is expected to remain there for some time to come. If markets expect the economy to reach its goals sooner rather than later, this can be seen as an expression of optimism.
“If you look at why they are moving upwards, it is related to the expectations of a return to more normal levels, more mandate-stable levels of inflation, higher growth, a starting economy,” said Jerome H. Powell, the Fed chairman, said of rates during a recent congressional testimony.
But markets are forward-looking: the economy still has a long way to go before it will be at full strength again. Administration officials have vowed not to be distracted by improvements in high numbers, such as overall growth in jobs, and rather to fuel recovery until historically disadvantaged groups have regained jobs, income and the benefits of other measures for economic progress.
The job increase last month is above the forecast of economists, but it will take more than two years to hire at the current level to return the labor market to its employment level again in early 2020.
Although all demographic groups are still experiencing economic pain, the dropout rate is not evenly distributed. Employment for black workers remains nearly 8 percent below the prepandemic level, while employment for white workers is declining by about 5 percent. Black workers tend to lose a lot of work during recessions and only then regain it after a long growth of work.
Mrs. Jones, the labor department’s economist, said the government was determined to accelerate the recovery for marginalized workers, noting that black workers in particular had taken years longer to recover from the 2008 financial crisis – a delay that would last. left scars on the households. .