Powell Urges ‘Society-Wide’ Push to Deliver Full Employment

Federal Reserve Chair Jerome Powell said the U.S. job market remains a long way from a full recovery and called on both lawmakers and the private sector to support workers.

“We are still very far from a strong labor market whose benefits are broadly shared,” Powell said Wednesday in a speech to the Economic Club of New York, noting that employment last month was nearly 10 million below February 2020 levels. “Achieving and sustaining maximum employment will require more than supportive monetary policy.”

Powell’s remarks echo the urgency voiced by President Joe Biden for his $1.9 trillion in additional pandemic aid, a package that is moving ahead in Congress despite Republican opposition. In doing so, he also delivered a nuanced rebuttal to the minority of Democrats, as exemplified by former Treasury Secretary Lawrence Summers, who view that relief proposal as too large.

Repeating that monetary policy would remain very supportive of the economy, the Fed chair cited a need for continued fiscal policy support.

Returning to maximum employment “will require a society-wide commitment, with contributions from across government and the private sector,” Powell said. “The potential benefits of investing in our nation’s workforce are immense.”

His remarks were swiftly seized by Democrats as validating their push to go big with the next round of fiscal aid.

“Chair Powell’s assessment reiterates the need for the strongest possible benefits package in our Covid relief bill,” Senate Finance Committee Chair Ron Wyden said in a statement, noting that the speech delivered a “bleak” evaluation of joblessness in America.