US Treasury Secretary Janet Yellen and the Federal Reserve Chair Jerome Powell said on Tuesday that more stimulus is needed for a recovery from the coronavirus pandemic in the world’s largest economy.
“While we’re seeing signs of recovery, we should be clear-eyed about the hole we’re digging out of: The country is still down nearly 10 million jobs from its pre-pandemic peak,” Yellen said before the House of Representatives Financial Services Committee.
“Of course, the speed and strength of our recovery depend, in part, on how we implement the legislation,” she added, referring to President Joe Biden’s massive $1.9 trillion relief bill that was signed into law.
Yellen, the former head of the Fed, said she expects the American economy to return to full employment next year.
“One-in-10 homeowners with a mortgage are behind on their payments, and almost one-in-five renters are behind on their rent. There are 22 million people who say they don’t have enough food to eat. One-in-10 adults are hungry in America,” she noted.
Powell reiterated his stance by saying economic recovery is far from complete and the Fed will continue to provide support for the economy for as long as it takes.
“The recovery has progressed more quickly than generally expected and looks to be strengthening due to the unprecedented fiscal and monetary policy actions,” he said.
Although the US labor market added 379,000 jobs in February, and the leisure and hospitality sector recouped about two-thirds of jobs lost in December and January, Powell issued a warning.
“Sectors of the economy most adversely affected by the resurgence of the virus, and by greater social distancing, remain weak, and the unemployment rate—still elevated at 6.2%—underestimates the shortfall, particularly as labor market participation remains notably below pre-pandemic levels,” he said.
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