WASHINGTON (AP) – The U.S. economy, fueled by faster vaccinations and signs of quick hiring, is heading for a strong recovery, Federal Reserve Chairman Jerome Powell said Thursday.
But he warns that not everyone will immediately benefit from it.
“There are a number of factors converging to support a better outlook for the US economy,” Powell said during the International Monetary Fund’s World Bank virtual meetings. These factors put the country ‘on course to reopen the economy fairly soon’.
Powell nevertheless said that many Americans who go without jobs will struggle to find new jobs because some industries are likely to be smaller than before the pandemic.. In other cases, employers want to use technology instead of workers, where possible, he said.
“It’s important to remember that we are not going to go to the same economy again,” Powell said. “It’s going to be a different economy.”
Powell spoke with other world economic leaders during the meetings of the two global lending agencies. The roundtable discussion also addressed an emerging trend that richer countries are 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 went to low-income countries, she said.
“If we do not do something to change the pace at which the poorer countries gain access to vaccines, it will take a long time to get herd immunity for the world,” Oknojo-Iweala said. This, in turn, could threaten the countries that have already been vaccinated by spreading new variants that could increase the number of cases and stop economic progress in richer countries.
Powell also endorsed the idea of more government investment in the United States, although he said he did not refer to any specific legislation. President Joe Biden earlier this week proposed a $ 2.3 billion infrastructure investment package.
The Fed chair made an unusual personal acknowledgment, noting that he was driving through a tent city of homeless people on his way home from the Fed headquarters in Washington, DC.
“I think we as a country really need to invest in things that will increase the inclusivity of the economy and its long-term potential, and especially in investing in people so that they can … benefit from the prosperity of our economy,” he said. he said.
Powell’s term as chairman of the Fed will end in 2022. Asked if he would be reappointed by Biden, he said: “I do not spend any time thinking about it.”
Biden, in turn, said Tuesday that he has not yet spoken to Powell, his approach in contrast to his predecessor, Donald Trump, who regularly criticized and attacked Powell on Twitter, although he elevated him to the Fed chair position. .
“I want to be clear that I’m not going to do the kind of things that were done in the previous government,” Biden said, among other things, “to tell the Fed what they should and should not … So I was very determined not to talk to them, but I did talk to the Minister of Treasury. ‘
Treasury Secretary Janet Yellen is Powell’s predecessor, and Powell served on the Fed’s board of governors when she was chairman.
The IMF on Tuesday raised its economic forecast for global economic growth this year to 6%, compared to a forecast of 5.5% in January. The increase in growth can be seen as a result of accelerated vaccination of vaccines and the $ 1.9 billion bailout package that Biden’s government passed through Congress last month.
IMF Executive Director Kristalina Georgieva told reporters on Wednesday that last year’s recession, the worst since World War II, would have been three times worse without the enormous amounts of support offered by governments.