China News Service, New York, June 16-The Federal Reserve Chairman Powell said in a US Congress hearing on the 16th that despite the recent improvement in the US economic situation, the higher unemployment rate and the tide of small business failures due to the new coronary pneumonia epidemic The US economy still faces "significant long-term damage."
Powell attended the hearing of the Senate Committee on Banking, Housing and Urban Affairs of the United States Congress. He said that unless the epidemic is truly controlled and recognized by the public, it is unlikely that a full economic recovery will occur. The longer the economic downturn lasts, the more serious the long-term damage from permanent unemployment and business failure will be. On the other hand, most of the unemployed people brought by measures to control the epidemic, such as family orders, are low-income people, ethnic minorities, and women. Powell warned that if the downward trend of the economy cannot be controlled and reversed, the gap between rich and poor will widen.
Powell said that if Congress can approve the provision of funds for direct assistance, it will not only save the immediate needs of families and businesses, but also control the long-term sustained damage to the economy.
U.S. Treasury Secretary Mnuchin previously said in a Senate hearing that he supports the introduction of a new round of economic bailout plans and should focus on supporting industries and small businesses that are most affected by the epidemic.
The Wall Street Journal reported that US retail sales in May increased by 17.7% from April to US$485.5 billion, but still significantly lower than February’s US$527.3 billion; compared with May 2019, retail sales decreased by 6.1% . Economists had previously forecast that retail sales in May will increase by 7.7% from April. The good news in the retail industry also pushed up the stock market.
Powell said that with the recent economic restart, some economic indicators have stabilized or even rebounded, but the economic output and employment rate are still far below the level before the epidemic. There are also a lot of uncertainties on the road to economic restart, depending on how the epidemic develops in the future and what anti-epidemic measures the government will take.
In terms of monetary policy, Powell’s position is consistent with the Fed’s statement after the regular monetary policy meeting last week. But he pointed out that the measures taken by the Fed are only part of the "broader public domain response." On the 10th of this month, the Fed announced that it would maintain the zero interest rate policy that began in mid-March and is expected to continue until the end of 2022 to support the economy out of its current predicament. (Finish)