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Fed's 'easy money bias' is needed

Here’s some good — and generally overlooked — news about the U.S. economy: among major ethnic and racial groups, African-Americans scored the biggest job advances in 2015. This conclusion comes from the Economic Policy Institute (EPI), a left-leaning think tank and advocacy group. It reports that black Americans made “notable employment gains ... even as employment growth for whites and Hispanics slowed.”

The evidence? EPI cites a statistic called the “employment-to-population ratio,” which is the share of adults who have a job. In 2015, that increased 1.5 percentage points for blacks compared with a 0.1 percentage point increase for whites and a slight decline for Hispanics. Put differently: in December, 56.4 percent of blacks had a job compared with 54.9 percent a year earlier. Note: those without jobs include both people who want work — the unemployed — and those who don’t — for instance, many retirees and students.

The point can be made more easily with conventional employment and unemployment figures. Consider:

• Although blacks represent only an eighth of the labor force — people who have or want a job — they accounted for nearly a third of the jobs created in 2015, or 774,000 out of 2.49 million.

• The unemployment rate dropped faster for blacks than for any other major racial or ethnic group. It fell from 10.4 percent in December of 2014 to 8.3 percent — a decline of more than two percentage points. By contrast, declines for other groups were much smaller. The rate for whites fell from 4.8 percent to 4.5 percent; the rate for Hispanics went from 6.5 percent to 6.3 percent; and the rate for Asian-Americans from 4.2 percent to 4 percent.

Of course, these last figures highlight the bad news in the good news. Black unemployment remains appallingly high, and, despite recent gains, the black employment-to-population ratio — 56.4 percent in December — remains lower than those for whites (59.9 percent), Hispanics (61.4 percent) and Asians (60.5 percent).

Black unemployment is receding more rapidly now, because it starts from a much higher base and because earlier job gains have sharply reduced unemployment among whites, Hispanics and Asians. As EPI puts it:

“African-American workers are often hardest hit during a recession and do not fully recover without robust job growth that significantly reduces the national unemployment.”

The policy implications, EPI argues, are clear: The Federal Reserve needs to maintain its easy-money bias until “all groups” benefit fully from the recovery.

Robert Samuelson is a columnist with The Washington Post Writers Group.

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