Full Employment and Balanced Growth Act (Humphrey–Hawkins Act)

Full Employment and Balanced Growth Act (Humphrey–Hawkins Act, 1978)

1) Link to the Text of the Act
Read the statute (15 U.S.C. §§ 3101–3151)

2) Why It Was Done
Enacted during the economic turmoil of the 1970s (stagflation, high unemployment, and inflation), the Act built on the Employment Act of 1946 by setting explicit goals for reducing unemployment and inflation, while requiring the Federal Reserve to coordinate with Congress.

3) Pre-existing Law or Constitutional Rights
The Employment Act of 1946 established a general commitment to economic stability. Humphrey–Hawkins expanded this by imposing numerical targets and mandatory reporting, grounded in Congress’s Commerce Clause powers.

4) Overreach or Proper Role?
Supporters saw it as a necessary step to hold the Fed accountable and to balance employment with inflation control. Critics argued it over-politicized monetary policy and imposed unrealistic economic goals.

5) Who or What It Controls

  • President (required to submit annual Economic Report with job/inflation goals)
  • Federal Reserve (mandated to report twice a year to Congress on monetary policy)
  • Congress (established oversight role through hearings and reports)
  • Labor markets & economy (indirectly guided through policy targets)

6) Key Sections / Citations

  • 15 U.S.C. § 3101: Statement of economic goals (full employment, balanced growth, price stability, balanced trade)
  • 15 U.S.C. § 3122: Annual Economic Report requirements
  • 15 U.S.C. § 3131: Federal Reserve semi-annual reporting to Congress

7) Recent Changes or Live Controversies

  • The numerical targets expired in 2000, but the Fed’s semi-annual testimony to Congress remains law.
  • Continues to shape debates on whether the Fed should prioritize inflation vs. unemployment.
  • Referenced in modern “dual mandate” discussions, especially during economic crises (2008 recession, COVID-19).

8) Official Sources