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Trump’s Time ECONOMY 19
stability. However, the central bank
last year said it would allow inflation
to run above its 2% target "for some
time" in order to achieve its
employment objective.
The Fed as recently as 2019 thought
a 4 . 1 % u n e m p l o y m e n t r a t e
represented "full employment.”
That was until Trump's tax cuts and
deregulation helped the U.S.
economy, before the pandemic,
achieve its lowest unemployment "strong job creation.”
rate since the 1950s. The policies
h e l p e d a c h i e v e r e c o r d l o w Other Biden policies, like the
unemployment for Asians, Blacks president's assault on the oil industry,
and Hispanics. are also impacting the labor market.
In April 2020, the unemployment rate Oil-producing states like Texas
skyrocketed to a record high of 14.8% (6.2%), New Mexico (7.6%) and
as nonessential businesses were A l a s k a ( 6 . 6 % ) a l l h a v e
forced to close their doors in order to unemployment rates well above the
help slow the spread of COVID-19. 5.4% national average as Biden's
policies have limited production and
Workers have been returning to the increased reliance on OPEC.
labor market amid a reopening of the
economy, but policies put in place by Those policies, and other factors,
the Biden administration have limited including the state of the reopening of
job gains. schools and day care, the child tax
credit, and proposed corporate tax
Biden extended the extra $300 per hikes, could make it even more
week in supplemental unemployment difficult for the Fed to achieve
benefits until September, something maximum employment as labor force
Federal Reserve Chairman Jerome participation is likely to remain
Powell admitted is having an impact uncertain.
on people returning to work.
“I think we should aim for trying to get
He said at his press conference on that unemployment rate as low as we
July 27 that the rolling off of "very can," George said. "It's hard right
generous unemployment benefits" now, given the nature of the shop, to
and other factors should result in know what exactly that looks like."
