Fed chief: No returning to pre-pandemic economy
WASHINGTON — Federal Reserve Chairman Jerome Powell said Tuesday that the U.S. economy has been permanently changed by the COVID pandemic and it is important that the central bank adapt to those changes.
“We’re not simply going back to the economy that we had before the pandemic,” Powell said at a Fed virtual town hall for educators and students. “We need to watch carefully as the economy continues to get through the pandemic and try to understand the ways that the economy has changed and what the implications are for our policy.”
Powell said that, while it is not yet clear if the Delta variant of COVID will have further impact on the economy, the country has already seen significant changes since the pandemic began shutting the country down in March 2020. Those changes range from the increase in remote work, to restaurants offering more take-out meals, to real estate agents learning to show homes virtually, he noted.
“It seems a near certainty that there will be substantially more remote work going forward,” Powell said. “That’s going to change the nature of work and the way work gets done.”
Powell said the heavy investment by companies in technology means there will be more jobs in the future associated with maintaining that technology but also potential job losses in industries focused on in-person contact. He said some of those industries may be moving to an “automated, no-contact model.”
“It may be that some of these people will have a harder time finding their way back into the workforce without more education and training,” he said. He said there are millions of people who have lost service sector jobs and remain out of work and need to be supported: “That’s a part of the recovery that’s far from complete.”