WASHINGTON (AP) – The US economy, boosted by accelerated vaccinations and signs of rapid hiring, is on track 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 better outlook for the US economy,” Powell said at the virtual spring meetings of the International Monetary Fund and the World Bank. Those factors put the nation “on track to allow for a full reopening of the economy fairly soon.”
Still, Powell said many unemployed Americans will struggle to find new jobs, as some industries are likely to be smaller than they were before the pandemic.In other cases, employers try to use technology instead of employees whenever possible, he said.
“It’s important to remember that we’re not going back to the same economy,” Powell said. “This will be a different economy.”
Powell spoke with other global economic leaders at the meetings of the two global lenders. The roundtable also addressed an emerging trend of wealthier countries recovering from the pandemic much faster than poorer countries, in part due to much faster vaccinations.
Ngozi Oknojo-Iweala, director general of the World Trade Organization, said the unequal distribution of vaccines could threaten the global economic recovery. Only 0.1% of the vaccines have gone to low-income countries, she said.
“If we don’t do anything to change the pace at which poorer countries get access to vaccines, it will be a long time before we get immunity to the world,” said Oknojo-Iweala. That, in turn, could threaten already vaccinated countries by spreading new variants that could drive up the number of cases and reverse economic progress in wealthier countries.
Powell also endorsed 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 proposed a $ 2.3 trillion infrastructure investment package earlier this week.
The Fed chairman made an unusual personal confession, noting that he was driving past a tent city with homeless people on his way home from the Fed headquarters in Washington, DC.
“I think we really as a country – and I’m not talking about any particular bill – should invest in things that will increase the economy’s inclusiveness and long-term potential, and most importantly, invest in people so that they can. take advantage of the prosperity of our economy, ”he said.
Powell’s term as Fed chairman ends in 2022. He was asked if he would be reappointed by Biden and said, “I’m not thinking about that.”
Biden for his part said on Tuesday that he had not spoken to Powell yet, his approach contrasts with his predecessor, Donald Trump, who often criticized and attacked Powell on Twitter, even though he had elevated him to the Fed seat.
“I want to be very clear that I’m not going to do the kind of things that had been done in the previous administration,” said Biden, including “telling (the Fed) what they should and shouldn’t be doing… So I have very I went to great lengths not to talk to them, but I will talk to the Minister of Finance. “
Treasury Secretary Janet Yellen is Powell’s predecessor, and Powell served on the Fed’s board of governors when she was chair.
On Tuesday, the IMF raised its economic forecast for global economic growth to 6% this year, from a 5.5% projection in January. The increased growth is largely due to accelerated vaccine roll-out and the $ 1.9 trillion bailout package pushed by the Biden administration through Congress last month.
Kristalina Georgieva, director of the IMF, told reporters on Wednesday that without massive amounts of government support, last year’s recession, the worst since World War II, would have been three times as severe.