CEPR - March 3, 2015 - The NYT examined the impact the Fed has on unemployment among African Americans and came up with the bizarre conclusion that the Fed can't do much:

"The Fed has a hammer, and, as the saying goes, not all problems are nails."

This conclusion is bizarre, because the data are very clear; efforts to reduce the overall unemployment rate disproportionately help African Americans and Hispanics. As a rule of thumb, the African American unemployment rate is roughly twice the unemployment rate and the unemployment rate for African American teens is roughly six times the white unemployment rates. (The unemployment rate for Hispanics is generally 1.5 times the white unemployment rate.)

In keeping with this rule of thumb, the unemployment rate for whites in January was 4.9 percent. It was 10.3 percent for African Americans and 29.7 percent for African American teens. Here's what the longer term picture looks like.

If we could get back to 2000 levels of unemployment, when the unemployment rate for whites bottomed out at 3.4 percent, we might see something like the 7.0 percent unemployment rate for blacks overall and 20.0 percent we saw for black teens back in April of 2000.

Alternatively, to flip it over and talk about employment rates, the percentage of black teens that was employed peaked at 31.7 percent in 2000, more than 50 percent higher than the 19.6 percent figure for last month. Does anyone really want to say that increasing the probability that black teens will have a job by 50 percent doesn't make a difference?

There is a separate issue as to whether it would be possible to get down to 4.0 percent unemployment without triggering spiraling inflation. This is an arguable point. But it is worth noting that those who say it is not possible to have 4.0 percent unemployment today also said that it was not possible back in 2000.

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