WASHINGTON (AP) – The U.S. economy, boosted by accelerating vaccinations and signs of rapid employment, 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 that come together to support a brighter outlook for the US economy,” Powell said at the virtual meetings of the International Monetary Fund and the World Bank. These factors put the nation “on the right track to allow the full reopening of the economy soon enough.”
However, Powell said many unemployed Americans will struggle to find new jobs because some industries will likely be smaller than they were before the pandemic.. In other cases, employers are looking to use technology instead of workers where possible, he said.
“It’s important to remember that we’re not going to go back to the same economy,” Powell said. “This will 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 of richer nations recovering much faster from the pandemic than poorer countries, in part because of much faster vaccinations.
Ngozi Oknojo-Iweala, director general of the World Trade Organization, said the uneven distribution of vaccines could threaten the global economic recovery. Only 0.1 percent of vaccines went to low-income countries, she said.
“If we do nothing to change the pace at which poorer countries have access to vaccines, it will take a long time to reach the herd’s immunity for the world,” Oknojo-Iweala said. This, in turn, could threaten those already vaccinated nations, spreading new options that could increase the number of cases and reverse economic progress in richer countries.
Powell also supported the idea of greater government investment in the United States, although he said he did not refer to any special legislation. President Joe Biden proposed a $ 2.3 trillion infrastructure investment package earlier this week.
The Fed chair made an unusual personal admission, noting that he was driving through a homeless tent city on his way home from the Fed headquarters in Washington, DC.
“I think we really need a country – and I’m not talking about any special bill – to invest in things that increase the inclusion of the economy and its long-term potential, and especially to invest in people, so that they to be able to … benefit 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 reappointed by Biden and said, “I don’t spend any time thinking about it.”
Biden, for his part, 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 raised him as Fed chairman .
“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 saying (Fed) what it should and shouldn’t do … So I was very determined not to talk to them, but to talk to the secretary of the treasury. ”
Treasury Secretary Janet Yellen is Powell’s predecessor, and Powell served on the Fed’s board of directors when she was president.
On Tuesday, the IMF raised its economic forecast for global economic growth this year to 6%, up from 5.5% in January. The increase is largely due to the accelerated launch 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 massive government support, last year’s recession, the worst since World War II, would have been three times as severe.