Progress toward Unemployment and Inflation Objectives

The unemployment rate peaked in late 2009 and, until recently, made steady progress toward the FOMC’s unemployment rate objective. Recent actions taken to limit the community spread of the coronavirus have curbed economic activity and the unemployment rate has increased. In March, the unemployment rate increased to 4.4 percent and is above the central tendency of FOMC participants’ longer run projections made in December.¹

Notes: FOMC projections are the median of the FOMC participants' forecasts for the unemployment rate as reported in the most recent Summary of Economic Projections. These projections were made in December 2019. Because of rapidly evolving developments related to the spread of the coronavirus, the FOMC did not release a March 2020 SEP and plans to return to a normal SEP schedule in June 2020. Source: U.S. Bureau of Labor Statistics and Federal Open Market Committee from Haver Analytics.

Turning to our price stability mandate, core inflation has consistently run below the FOMC’s 2 percent goal since the end of 2007 with the exception of a brief period in mid-2018. The coronavirus outbreak will likely hold down inflation this year.

Notes: FOMC projections are the median of FOMC participants' forecasts for core PCE inflation as reported in the most recent Summary of Economic Projections. These projections were made in December 2019. Because of rapidly evolving developments related to the spread of the coronavirus, the FOMC did not release a March 2020 SEP and plans to return to a normal SEP schedule in June 2020. Source: Federal Open Market Committee and U.S. Bureau of Economic Advisors from Haver Analytics.

Notes

¹ On March 19, 2020, California became the first state to issue a stay-at-home order and shut down all non-essential businesses. Other states have followed.