WASHINGTON (AP) – The U.S. economy, driven by accelerating vaccinations and signs of rapid hiring, is heading for a strong recovery, Federal Reserve Chairman Jerome Powell said Thursday.
But he warned that not everyone will benefit immediately.
“There are a number of factors coming together to support a brighter outlook on the U.S. economy,” Powell said during the virtual spring meetings of the International Monetary Fund and the World Bank. These factors are putting the nation “on track to allow a complete reopening of the economy soon enough.”
Still, Powell said many unemployed Americans will struggle to find new jobs because some industries are likely to be smaller than before the pandemic.. In other cases, employers are looking to use technology instead of working, whenever possible, he said.
“It’s important to remember that we won’t go back to the same economy,” Powell said. “This will be a different economy.”
Powell spoke alongside other world economic leaders during the meetings of the two global lending agencies. The roundtable also addressed an emerging trend of richer nations recovering much more quickly from the pandemic than poorer countries, in part due to much faster vaccinations.
Ngozi Oknojo-Iweala, director general of the World Trade Organization, said the uneven distribution of vaccines could threaten global economic recovery. Only 0.1% of vaccines have gone to low-income countries, he said.
“If we don’t do something to change the pace at which the poorest countries have access to vaccines, it will take us a long time to reach the herd’s immunity for the world,” Oknojo-Iweala said. This, in turn, could threaten those already vaccinated nations, extending new variants that could increase the count of cases and reverse economic progress to richer countries.
Powell also supported the idea of more government investment in the United States, although he specified that he was not referring to any particular legislation. President Joe Biden earlier this week proposed a $ 2.3 trillion infrastructure investment package.
The Fed chair made an unusual personal admission, noting that he was driving through a city of homeless stores when he was leaving home from the Fed headquarters in Washington, DC
“I think that really as a country – and I’m not talking about any particular bill – we need to invest in things that increase the inclusion of the economy and its long-term potential, and invest particularly in people because … benefiting from the prosperity of our economy, “he said.
Powell’s term as Fed chairman will end in 2022. He was asked if he would be re-appointed by Biden and said, “I don’t spend time thinking about that.”
Biden, meanwhile, said Tuesday that he had not yet spoken to Powell, his approach contrasting with his predecessor, Donald Trump, who often criticized and attacked Powell on Twitter, even though he had elevated him to the presidency of Powell. the Fed.
“I want to be very clear that I’m not going to do the kind of things that were done in the last administration,” Biden said, including “telling (the Fed) what to do and what not to do. “So I was very demanding not to talk to them, but to the Secretary of the Treasury.”
Treasury Secretary Janet Yellen is Powell’s predecessor, and Powell served on the Fed’s governing board when she was president.
On Tuesday, the IMF raised its economic forecast for global economic growth this year to 6%, compared with a projection of 5.5% in January. The increase in growth is due in large part to the accelerated deployment of vaccines and the $ 1.9 trillion rescue package that the Biden administration pushed into Congress last month.
IMF Managing Director Kristalina Georgieva told reporters on Wednesday that without the massive amounts of support provided by governments, last year’s recession, the worst since World War II, would have been three times more severe. .