This short video shows the impact of the COVID-19 pandemic on retail sales and employment levels.
Federal Reserve Response: Federal Funds Rate
Federal Reserve Response: Holdings of Long-term Securities
The Covid-19 pandemic has had a major economic impact. The Federal Reserve System responded to it using conventional and unconventional monetary policy tools.
Let’s FRED that.
Social distancing has changed spending habits. For example, in this graph you can see a fairly steady growth of retail sales at restaurants and bars (the black line) catching up to retail sales at food and beverage stores (the red line).
Starting in March, those trends changed: consumer demand switched—almost dollar for dollar.
Employers shed an unprecedented number of jobs.
Only the American Telephone & Telegraph Co. union workers’ strike of August 1983 (the blue bars at the left of the graph) is comparable in magnitude.
Because there are fewer persons employed, the unemployment rate tripled between February and April.
The Federal Reserve responded by lowering interest rates to make borrowing by businesses and households cheaper.
The Federal Reserve also increased its holdings of long-term securities to promote the stability of the financial system itself.
To build the graphs and learn more about each topic, visit fred.stlouisfed.org.