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Fed’s Changing Jobs Doctrine Comes to Grips With Racial Inequity

  • Pandemic and unrest underline shift in focus at central bank
  • Strategy rethink may help narrow gaps in labor-market outcomes
Photographer: Andrew Harrer/Bloomberg

The coronavirus pandemic and a wave of social unrest across the country have put a spotlight on the deep inequality between black and white America. So has a shift in focus at the U.S. central bank.

For decades, Federal Reserve policy makers have defined their goal of full employment without much regard to the longstanding gaps between joblessness for white Americans and those for minorities. When they began raising interest rates in 2015 to guard against the possibility of inflation, white unemployment was 4.4%, while black unemployment was 8.5%.