Fed chief questioned prospects for US economic recovery

The prospects for the recovery of the American economy from the consequences of the pandemic of the new coronavirus remain extremely uncertain, said the chairman of the US Federal Reserve System (FRS) Jerome Powell.

“The recovery is faster than expected overall, and FOMC members’ forecasts for economic growth this year have been revised upward from their forecast in June. Despite this, the level of economic activity as a whole remains lower than before the pandemic, and the path forward remains largely uncertain, ”says Powell.

According to the head of the Federal Reserve, a full economic recovery in the United States will probably not be until the pandemic subsides and people are confident that a full return to work is safe.

He also noted that the labor market situation in the United States has improved, but there is still a long way to a full recovery. “The number of initial claims for unemployment benefits has dropped very sharply from the extremely high level seen in March and April to a lower level, and it remains either at the same level or gradually declining,” Powell said.

“This suggests that the situation on the labor market has improved, but there is still a long way to go to maximum employment, and it will take some time to get back to what it was,” – said the head of the Fed.

“There were simply too many disruptions in many sectors of the economy. And now it’s really hard to say exactly where we’re at, ”Powell added.

Earlier, the head of the US Treasury warned of the threat of destruction of the American economy.

Recall, according to the assessment of the Bureau of Economic Analysis of the US Department of Commerce, the United States GDP fell by 33% in the second quarter. At the same time, the head of the US Federal Reserve Jerome Powell in May predicted a collapse of US GDP in the second quarter by 20%.

In the first quarter of 2020, U.S. GDP fell 4.8% year over year. At the same time, the quarterly decline in US GDP was called a “prelude” to a major blow to the economy.