WASHINGTON (Reuters) – The labor market will take time to heal from the effects of the COVID-19 pandemic and more needs to be done for the U.S. economy to get fully back on track, Federal Reserve Governor Michelle Bowman said on Tuesday.
“Despite the encouraging pace of recent hiring, employment is still far below where it was…I am hopeful that we will continue to build on this recent positive momentum, since there is more work to be done to get the economy back on strong footing,” Bowman said in prepared remarks to a conference on fostering an inclusive economic recovery.
Earlier on Tuesday, San Francisco Fed President Mary Daly echoed those sentiments, pointing out there are almost 10 million people who are unemployed and more currently on the sidelines of the labor market.
Those views diverge with some other officials at the central bank as the interest-rate setting committee mulls when to start withdrawing some of the extraordinary monetary support designed to help the U.S. economy recover from the health crisis.
In recent days, Fed Governor Christopher Waller and St. Louis Fed President James Bullard both said they believed the job market recovery is nearing completion and that the Fed should begin reducing its billions in monthly bond purchases sooner rather than later.
The Fed has said it will begin to taper when “substantial further progress” toward its maximum employment and flexible 2% inflation goals have been met.
In her speech, Bowman noted that in November almost half of workers with a college degree or more said that they worked entirely from home compared to 10% of workers with a high school degree or less and that the disproportionate impact of the pandemic on Hispanic and Black workers had reversed their recent employment gains.
“Currently, some people face difficult choices regarding the availability of jobs and changing lines of work. So it may take time for some people to reenter the labor force,” Bowman said. “Many households still face challenging times.”
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