- The US economy is about to start growing “much more quickly,” Federal Reserve Chairman Jerome Powell told CBS.
- The biggest risk to the economic recovery is another surge in coronavirus cases, Powell said.
- He credited steady vaccinations, stimulus, and strong monetary policy for the rebounding economy.
- See more stories on Insider’s business page.
Federal Reserve Chairman Jerome Powell says the US economy is about to start growing “much more quickly,” but a resurgence in COVID-19 cases could derail that progress.
Powell discussed the US economic recovery from the coronavirus pandemic with CBS’ Scott Pelley, in an interview set to be aired on 60 Minutes Sunday at 7 pm ET.
In a preview of the interview, Powell said the US economy is at an “inflection point” more than a year after the virus forced widespread lockdowns, tangling supply chains, shuttering businesses, and leaving millions of Americans unemployed.
Powell said the economy is picking up steam “because of widespread vaccination and strong fiscal support, strong monetary policy support.”
“We feel like we’re at a place where the economy’s about to start growing much more quickly and job creation coming in much more quickly. The principal risk to our economy right now really is that the disease would spread again. It’s going to be smart if people can continue to socially distance and wear masks,” Powell told CBS.
The March jobs report showed positive signs, adding 916,000 nonfarm payrolls, well-exceeding economists’ expectations. The unemployment rate fell to 6% from 6.2%, matching forecasts, still far above the 3.5% pre-pandemic rate.
While businesses reopen and hiring appears to be surging, many employers have said they are struggling to fill vacant jobs, especially in the restaurant and retail sectors, which took a huge hit last year.
Powell earlier this month said some people may struggle to reacclimate to an economy permanently changed by the pandemic, adding the Fed will continue to provide support to prevent scarring and persistent unemployment.
“The real concern is that longer-term unemployment can allow people’s skills to atrophy, their connections to the labor market to dwindle, and they have a hard time getting back to work,” he said in the conference. “It’s important to remember we are not going back to the same economy, this will be a different economy,” Powell said in a virtual conference hosted by the International Monetary Fund.
Powell and experts have also cautioned that another wave of the coronavirus could unwind economic progress.
Even as vaccinations continue to roll out in the US at a steady pace, confirmed cases of COVID-19 in the US have again been on the rise. The director of the Centers for Disease Control and Prevention last month warned of “impending doom” and a possible fourth surge of the virus, spurred by variants.
On Saturday, an Israeli study found coronavirus variants first found in South Africa and the UK are able to partially “breakthrough” the Pfizer/BioNTech vaccine. The study has not yet been peer-reviewed.
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