Jerome Powell considers the pace of the recovery “extremely uncertain”. (Photo: Getty Images)
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The rebound in the US economy started faster than expected, said Jerome Powell, president of the Central Bank, in a speech prepared for his hearing Tuesday before a committee of the House of Representatives.
“We have entered an important new phase and we have done it earlier than expected,” he says, while emphasizing that production and employment remain at levels much lower than before the pandemic.
While since May, the world’s largest economy has shown signs of improvement with several indicators that have returned to green, Jerome Powell judges the pace of the recovery “extremely uncertain”.
It “will largely depend on (our) success in containing the virus,” he said.
In addition, he says, a full recovery of the economy is “unlikely” until people have complete confidence that the pandemic is under control.
“The pace to come will also depend on political measures taken at all levels of government to provide relief (to the most vulnerable households, businesses and local communities) and support the recovery for as long as necessary,” he also commented.
Retail sales rose sharply in May, as did consumer spending, largely boosted by government aid.
Economists fear that this rebound will not continue as aid will dry up and that new foci of coronavirus have reappeared in the southwest of the country, especially in California, Texas and Florida, highly populated states.
Congress adopted a huge, more than $ 2 trillion emergency aid plan called the CARES Act in late March to help alleviate the impact of the crisis on the most vulnerable businesses and workers in the United States.
Jerome Powell has been urging legislators for weeks to vote on another plan to support the economy.
The House of Representatives had adopted a gigantic aid project of some 3 trillion dollars in mid-May, but the Republicans of the Senate are asking for amendments before examining it.
The Monetary Fund expects an 8% recession this year in the United States.
Jerome Powell reiterated on Monday that the contraction in GDP in the second quarter could be the worst in American history.
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