Federal Reserve Chairman Jerome Powell speaks at a press conference in September 2019.
Federal Reserve Chairman Jerome Powell says the U.S. economy is at an “inflection point” and job growth and hiring are expected to accelerate in the coming months, but some risks remain, particularly the resurgence of the Chinese communist virus (coronavirus) outbreak.
In an interview on CBS News Magazine’s “60 Minutes,” Powell reiterated his recent optimism about the U.S. economy and warned that COVID-19 remains a major risk.
Powell said, “We feel that we’re at a point where the economy is about to start growing faster, creating jobs faster, so the main risk to our economy right now is actually that the disease will spread again.”
He said, “If people can continue to keep their social distance and wear masks, that would be wise.”
Recent U.S. economic data has been generally upbeat, with 916,000 jobs created in March, beating expectations. Some officials at the Federal Reserve have hinted that 1 million new jobs are expected to be created each month later this year.
Although COVID-19 cases are trending up in some parts of the U.S., such as Michigan, infection rates are at multi-month lows in most of the country and the pace of vaccine rollout continues to accelerate. According to Reuters tracking, 4.6 million doses were recorded in a single day of vaccination on Saturday.
Reuters reports that economic activity in the hardest-hit leisure and entertainment sector has increased significantly in recent weeks, as consumers regained confidence in eating out and flying.
Despite the big jump in employment in March, the labor market still has 8.4 million fewer jobs than it did in February 2020, before the virus pandemic triggered a historic recession. If the viral pandemic hadn’t happened at all, that same period ratio would have been even farther off.
Powell and other Fed policymakers have repeatedly pledged over the past few months to provide tremendous support for the economy, and they won’t be abandoning their efforts to buy near-zero interest rates and $120 billion in bonds a month anytime soon.
Powell said on Thursday that the Fed has not reduced its support for the economy and that the upcoming rise in inflation may be a temporary phenomenon. He stressed, however, that the virus continues to dominate the economic outlook.
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