US Won't Reach 'maximum Employment' This Year: Powell

Washington, March 5 (UrduPoint / Pakistan Point News - 5th Mar, 2021 ) :The US labour market faces a lengthy recovery and the economy will not see maximum employment this year, Federal Reserve Chair Jerome Powell said Thursday.

While he expressed hope about the restoration of jobs lost during the pandemic, Powell noted that millions of workers have left the labor force.

"I think it's not at all likely it would reach maximum employment this year. I think it's going to take some time to get there," Powell said during an event hosted by The Wall Street Journal.

While there is "good reason to expect job creation to pick up in coming months," Powell said "we're still 10 million jobs short of where we were" before the pandemic.

A year ago, before Covid-19 forced business shutdowns and hemorrhaging of jobs, the US unemployment rate was at a 50-year low of 3.5 percent. With the pandemic shutdowns, it soared at one point to more than four times that rate.

And though it has recovered to 6.3 percent, Powell has said the true rate is closer to 10 percent including those people who have simply stopped looking for work.

"It's a lot of ground we have to cover," he said.

Jobless claims data released Thursday showed new applications rose again last week and remain above 700,000, higher than any point during the global financial crisis of 2007-2008.

And many unemployed workers will lose their benefits in 10 days unless Congress approves President Joe Biden's $1.9 trillion rescue package, which extends those benefits and provides $1,400 direct payments to all adults.

White House spokeswoman Jen Psaki said Thursday the unemployment claims number shows that "hundreds of thousands of Americans are continuing to struggle in this economy." "We can't get numb to what this represents," she added, saying "this also underscores the need for Congress to move quickly to pass the American Rescue Plan."The House approved the package last week, and it now faces debate in the Senate.

Biden indicated he was willing to compromise on some elements, saying "yes" he was comfortable with limiting the direct payments at the heart of the relief bill in order to satisfy more conservative senators.