U.S. Treasury Department Releases Report on the Historically Equitable Economic Recovery From the Pandemic
October 23, 2023 / Source: Treasury
New report shows that President Biden’s American Rescue Plan effectively delivered resources and aid to historically underserved communities, enabling economic recovery far more quickly than in previous downturns.
WASHINGTON – Today, the U.S. Department of the Treasury released a report providing new evidence that the recovery from the economic harm of the COVID-19 pandemic was the most equitable recovery in recent history. The report – which includes new Department research alongside new data released by the Federal Reserve Board – finds that the speed and strength of the response by the Biden-Harris Administration helped to thwart the worst economic outcomes anticipated from the COVID shock for Black and Hispanic families, and that, across a broad array of economic indicators, the financial well-being of Black and Hispanic families have remained strong relative to recoveries in recent history.
“This report shows that, as the Biden Administration policies have driven a historic economic recovery, we’ve also been building the economy we need for the long term – one that allows all communities to reach their economic potential,” said Deputy Treasury Secretary Wally Adeyemo. “The report shows the progress we’re making on building a more equitable economy, narrowing the racial wealth gap, and addressing enduring inequities in wealth accumulation. As we continue to implement the Investing in America Agenda, we remain committed to capitalizing on the progress made during the recovery and investing in the people, places, and infrastructure that have been too often left behind.”
Prospects for the American economy looked grim at the beginning of 2021, with professional forecasters expecting elevated unemployment to linger and output to remain well below trend. Had these pessimistic forecasts been realized, Black and Hispanic households would likely have experienced a disproportionate amount of economic pain. During economic downturns, Black and Hispanic Americans have historically faced unemployment rate increases that are larger than those faced by other groups.
But that pessimism was proven wrong—especially for those households too often left behind. President Biden’s American Rescue Plan effectively delivered resources and aid to historically underserved communities, enabling economic recovery more quickly than in previous downturns. As a result, the nation experienced a historically equitable recovery from the pandemic. For example, unemployment rates for Black and Hispanic individuals recovered far more quickly than in past recessions, and real earnings grew twice as much for these workers as they did in the three years following the onset of the Great Recession. Household wealth for Black and Hispanic Americans also significantly increased relative to prior downturns, and racial wealth gaps narrowed between 2019 and 2022.
Key statistics from the report:
- From 2019 to 2022, median wealth, adjusted for inflation, rose 60, 47, and 31 percent for Black, Hispanic, and white families respectively. These three-year gains were some of the largest in the history of the Survey of Consumer Finances and in stark contrast to the three years following the onset of the Great Recession when real wealth fell for all three groups.
- Within 20 months after the COVID recession peak, both Black and Hispanic unemployment rates were lower than they were at the same time in previous recoveries and have stayed lower through the most recent data.
- The gaps between Black and white, and Hispanic and white, unemployment rates have closed substantially, dropping to near their historic lows in 2023.
- During the COVID recession and recovery, the three-year growth rate of real earnings for full-time workers was 4.0 percent for Black workers and 2.4 percent for Hispanic workers.
- Foreclosure rates have remained low in the COVID recession and recovery in contrast to the Great Recession when they rose significantly.
- Between 2019 and 2022, Black, Hispanic, and white homeownership rates rose 2.9, 1.2, and 1.1 percentage points, respectively. This occurred despite interest rate increases, which raised the cost of borrowing beginning in early 2022. In comparison, homeownership rates fell over the Great Recession and rose by less for Black and Hispanic households in the 2001 recession and recovery.
- Black and Hispanic rates of business ownership skyrocketed in this recession, moving up by 6.2 and 2.8 percentage points to their highest recorded readings at 11 and 9.8 percent, respectively. These were the largest increases seen in the history of the Survey of Consumer Finances.
Today’s report on the equitable recovery from the pandemic comes ahead of the Treasury Department’s third annual Freedman’s Bank Forum on October 25, where senior Biden-Harris Administration officials will join key leaders from the public, private, nonprofit, and philanthropic sectors to discuss the Biden-Harris Administration’s efforts to increase economic opportunity for communities of color. Media wishing to attend can RSVP to [email protected].