Federal Reserve Chairman Jerome Powell is warning that the United States economy may not fully recover until the public believes the coronavirus is contained.
Powell, who testified before the Senate Banking Committee on Tuesday, explained the number of factors that contribute to the uncertainty surrounding economic recovery.
While Powell did note the recent positive employment report, he also warned that the “levels of output and employment remain far below their pre-pandemic levels, and significant uncertainty remains about the timing and strength of the recovery.”
Powell continued, “Much of that economic uncertainty comes from uncertainty about the path of the disease and the effects of measures to contain it.”
See Powell’s remarks below:
He went on to confirm his belief that the economic will not make a full recovery until the American public has assurance that the virus is contained.
“Until the public is confident that the disease is contained, a full recovery is unlikely,” Powell read from his prepared remarks.
According to Powell, “The longer the downturn lasts, the greater the potential for longer-term damage, permanent job loss, and business closures. Long periods of unemployment can erode workers’ skills and hurt their future job prospects. Persistent unemployment can also negate the gains made by many disadvantaged Americans.”
Powell’s latest remarks come as recent pandemic reports signal the possibility of the United States already entering a second phase of the virus.
Initially, the Centers for Disease Control and Prevention (CDC) officials projected that the United States could see a deadlier resurgence in the fall, as previously reported on IJR.
However, the Washington Post reports that approximately 21 states are already seeing significant rises in cases upon reopening and the first official day of summer is still days away.
Over the last week, Florida has seen a surge of more than 1,000 cases each day. On Tuesday, the state set a record for the highest number of new infections in a single day after there 2,783 new reported cases.
The previous highest number of new daily infection was on Saturday when 2,581 were reported.
As of Tuesday afternoon, there are more than 2.1 million coronavirus cases in the United States. The death toll stands a 118,696.
