AUDIE CORNISH, HOST:
There is positive news today about the U.S. job market. Unemployment claims last week fell to their lowest level since the pandemic took hold in the U.S. more than a year ago. Now, applications for jobless benefits are still high by historical standards. But in his news conference this afternoon, President Biden pointed to the drop in claims as a sign of progress.
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PRESIDENT JOE BIDEN: There are still too many Americans out of work, too many families hurting, and we still have a lot of work to do. But I can say to you, the American people, help is here, and hope is on the way.
CORNISH: NPR chief economics correspondent Scott Horsley joins us now. And, Scott, the Federal Reserve now expects the unemployment rate to fall to just 4.5% by the end of this year, a big improvement from where we were a year ago. Can - does anyone have a sense of why this is happening?
SCOTT HORSLEY, BYLINE: It is a big improvement, Audie. Unemployment was about three times this high this time last year. And the chairman of the Federal Reserve, Jerome Powell, talked about the turnaround on Morning Edition today. He credits, No. 1, the improving public health outlook. You know, more than 100 million vaccine shots have been given out by now. President Biden said that he wants to get to 200 million by the end of next month. Powell also talked about the trillions of dollars in economic lifelines that Congress has extended over the last year and the central bank's own swift and aggressive actions, which Powell compared to the desperate rescue of British forces from France during World War II.
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JEROME POWELL: I liken it to Dunkirk. You know, it was time to get in the boats and get the people, not to check the inspection records and things like that. Just get in the boats and go. And that's what we did.
HORSLEY: And financial markets stabilized pretty quickly. And now, a year after the stock market bottomed out, major stock indexes are at near-record highs.
CORNISH: That's not the only thing that came up. I understand Powell also spoke about racial inequality at the bank itself.
HORSLEY: That's right. The New York Times reported last month that out of more than 400 staff economists at the Fed, only two are African American. Powell said the Fed does work to recruit both Black and Latino economists, but he acknowledged the central bank has a long way to go in that effort.
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POWELL: We're trying hard and not at all happy with where we are on it, but we'll keep at it because it's a very high priority. And my own experience in the different things I've done in life is that institutions that focus on diversity and do it well are the successful institutions in our society.
HORSLEY: The Fed says it wants to be more inclusive in its own hiring, and it also wants a more inclusive job market for the whole country as well.
CORNISH: Powell also spoke today about the Fed's recent push to incorporate climate change as part of a financial oversight. What's he saying about how they do that?
HORSLEY: You know, part of the Fed's responsibility is making sure banks and other financial players are prepared for all different kinds of risks so the financial system doesn't get blindsided by, say, a drop in housing prices or a spike in unemployment. And Powell says that assessment should include the risks associated with a changing climate, although he stressed this is a pretty narrowly focused initiative.
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POWELL: It has never been our role or our practice to tell financial institutions which legal businesses they can and can't, should or shouldn't lend to. We don't allocate credit at the Fed.
HORSLEY: Nevertheless, the central bank is getting some pushback on this from GOP lawmakers who worry it could jeopardize financing for oil or gas companies and the like. So far, though, Powell is not yielding to that Republican resistance.
CORNISH: That's NPR's Scott Horsley. Scott, thank you.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.
