The U.S. economy is “much improved,” Federal Reserve Chair Jerome Powell said on Monday, crediting Congress and the central bank both for providing “unprecedented” support, but at the same time warning that the recovery is still “far from complete.”
“The recovery has progressed more quickly than generally expected and looks to be strengthening,” Powell said in remarks prepared for delivery to a congressional hearing on Tuesday morning. Household spending has risen, he said, and the housing sector has more than fully recovered.
“However, the sectors of the economy most adversely affected by the resurgence of the virus, and by greater social distancing, remain weak, and the unemployment rate — still elevated at 6.2% — underestimates the shortfall, particularly as labor market participation remains notably below pre-pandemic levels,” he said. “The recovery is far from complete, so, at the Fed, we will continue to provide the economy the support that it needs for as long as it takes.”
Fed policymakers and many private forecasters are expecting a surge in spending and economic growth in coming months as more Americans get vaccinated and venture out. Powell underscored that expectation but at the same time reiterated the Fed’s commitment to use “our full range of tools to support the economy and to help assure that the recovery from this difficult period will be as robust as possible.”
(With reporting by Dan Burns; Editing by Cynthia Osterman)
