“Despite the surprising speed of recovery early on, we are still very far from a strong labor market whose benefits are broadly shared,” Powell said on Wednesday while addressing a webcast….reports Asian Lite News
US Federal Reserve Chair Jerome Powell said that it’s important for the central bank to maintain a “patiently accommodative monetary policy stance” to boost the labour market recovery amid the ongoing Covid-19 pandemic.
“Despite the surprising speed of recovery early on, we are still very far from a strong labor market whose benefits are broadly shared,” Powell said on Wednesday while addressing a webcast.
“Employment in January of this year was nearly 10 million below its February 2020 level, a greater shortfall than the worst of the Great Recession’s aftermath,” he said, adding both long-term unemployment and permanent job loss have also increased in recent months.
If counting those who have left the labour force since last February as unemployed, the real unemployment rate was close to 10 per cent in January, higher than 6.3 per cent reported by the Labour Department, Powell was quoted as saying by the Xinhua news agency.
The Fed chief stressed that in the near term, policies that bring the pandemic to an end as soon as possible are “paramount” for the country to get back to a strong labour market.
“Also important is a patiently accommodative monetary policy stance that embraces the lessons of the past — about the labour market in particular and the economy more generally,” Powell said, downplaying potential inflation risks from a strong labour market.
“Inflation has been much lower and more stable over the past three decades than in earlier times,” he said, reiterating that the Fed will not tighten monetary policy solely in response to a strong labour market.
Powell also called for “a society-wide commitment” to return the labour market to full employment.
“Given the number of people who have lost their jobs and the likelihood that some will struggle to find work in the post-pandemic economy, achieving and sustaining maximum employment will require more than supportive monetary policy. It will require a society-wide commitment, with contributions from across government and the private sector,” he said.
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