Federal Reserve Chairman Jerome Powell on Tuesday made a fresh appeal to Congress to pass another coronavirus relief package to help troubled businesses and out-of-work Americans.
In a talk to a business group in San Francisco, Powell said Congress’ tax and spending powers can directly target income support for groups that really need it, in a way that the central bank cannot.
“There hasn’t been a bigger need for it in a long time,” Powell said.
The Fed boss said he expects the economic recovery that has taken root so far to continue “at a solid pace,” but cautioned that significant downside risks exists, even as progress on new vaccines and therapies have emerged. Those include experimental cures that Moderna
MRNA,
-4.78%
on Monday and Pfizer
PFE,
+1.85%
and its partner German-based BioNTech
BNTX,
-4.16%
a week ago have declared at least 90% effective against COVID-19 in late-stage trials.
“The vaccine news is certainly good news, particularly in the medium term,” Powell said.
In the near term, “there are significant challenges and uncertainty,” he added.
“The next few months may be very challenging,” the Fed chairman said.
The rate of economic improvement since May has been steadily slowing after an initial “outside bounce back,” he said.
Low-income workers whose jobs may call for them to interact with the public have borne the brunt of the losses during the pandemic, he noted.
October figures from the Labor Department, released in early November, showed that the U.S. regained 638,000 jobs and unemployment sank to fresh pandemic low of 6.9% from 7.9% in September as more people went back to work, but economists said the official rate understates the true level of joblessness.
About 10 million of the 22 million jobs that were lost early in the pandemic still haven’t been recovered, however.
Also missing from the official unemployment rate were roughly 3.5 million workers who’ve dropped out of the labor force.
Stocks were lower on Tuesday with the Dow Jones Industrial Average
DJIA,
-0.32%
down 130 points in early afternoon trading.
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