Federal Reserve Chair Jerome Powell on Friday said the U.S. jobs report for August was “a good one,” but signaled the central bank will keep monetary policy ultra-accommodative for years to support recovery from the coronavirus crisis and recession.
“I would say today’s jobs report was a good one,” Powell told National Public Radio in an interview. But, he also said, it will get harder from here.
“We think that the economy’s going to need low interest rates, which support economic activity, for an extended period of time,” Powell said. “It will be measured in years.”
The unemployment rate in August fell to 8.4 percent from 10.2 percent in July, and U.S. employers added 1.37 million jobs. But the total number of people employed nationwide has only recovered about half its losses since the crisis, leaving millions still out of work.
The Fed slashed rates to near zero in March and has rolled out a raft of lending programs to support businesses and households; it is also buying tens of billions of bonds monthly to keep markets functioning smoothly.
Under a new framework adopted last week, the Fed signaled it would not raise interest rates just because the labor market is improving, as Powell suggested in the interview it will continue to do. It also pledged to aim for inflation to rise moderately above 2 percent to make up for periods, like the current one, where it is lagging.
By Shubham Kalia