Last year unemployment reached a record low of 3.5% . The Fed Chairman Jerome Powell has said that it may be a long time before we hit that low again. The Fed has been doing a lot in the way of trying to mitigate the recession that we find ourselves in. Powell says that the Fed is limited in what it can do, and suggests that if we want to see that level of low unemployment again, the government has to pull the rest of the slack.
Also last year, we saw a growth in the labor force participation rate, which was mainly due to more women entering the labor force. The impact of COVID has lowered the LFPR, but we have seen that rate begin to return to normal. The return to normal has disproportionately affected women, as they are more likely to not to quit work if they have trouble accessing childcare. This will be especially true this school year as younger kids need someone to watch them so they are not home alone.
https://www.reuters.com/article/usa-fed-employment/update-1-feds-powell-sees-a-long-road-to-maximum-employment-idUSL1N2GE14Y
I definitely agree with the Fed Chairman that there are very limited options for them and that the government will have to get more involved in this unique situation. COVID has disproportionately affected women in the workforce as they are more likely to quit their jobs in order to care for their children and help them with their schooling. Women will return to the workforce when they can but it will be interesting to see exactly how many women. Not only has this pandemic affected the labor force participation rate, but experts are saying the gender unemployment gap could significantly reduce GDP in the future as well.
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