Op-Eds

The black unemployment rate is typically twice as high as the white unemployment rate, and African Americans are often the last to feel the economic benefits during a recovery. These realities are reflected in the fact that the unemployment rate for young black graduates is still worse today than it ever was for whites in the aftermath of the Great Recession. Young black college graduates (age 24–29) currently have an unemployment rate of 9.4 percent—higher than the peak unemployment rate for young white college graduates during the recovery (9.0 percent)

The news on the household side was mixed. While the unemployment rate remained steady at 5.0 percent, the employment rate fell by 0.2 percentage points to 59.7 percent. This was due to prime age (ages 25-54) workers leaving the labor force as the EPOP for prime age workers fell by 0.3 percentage points from 78.0 to 77.0. Presumably this reflects weakness of the labor market and not a sudden urge to retire among workers in their forties.

In The wrong tool for the right job: The Fed shouldn’t raise interest rates to manage asset bubbles, EPI Research and Policy Director Josh Bivens and Center for Economic and Policy Research Co-Director Dean Baker argue that higher interest rates are the wrong tool to combat asset bubbles. Instead, they point out that the Federal Reserve has more effective tools at its disposal to fight bubbles that will not inflict as much collateral damage on the labor market. Usual debates over the pace and timing of interest rate increases concern balancing the benefits of a tighter labor market against the costs of accelerating inflation. Because wage and price inflation both remain remarkably subdued, the case for quickly raising interest rates anytime soon is quite weak. Recently, the case that higher interest rates are necessary for avoiding the type of bubbles that caused the recessions of 2001 and 2008 has been thrown into current debates. Kansas City Federal Reserve President Esther George is the most prominent current policymaker to recently make this argument.