The U.S. economy, boosted by quickening vaccinations and signs of rapid hiring, is headed toward a strong recovery, Federal Reserve Chair Jerome Powell said Thursday.
But he cautioned that not all will immediately benefit.
“There are a number of factors that are coming together to support a brighter outlook for the U.S. economy,” Powell said during the virtual spring meetings of the International Monetary Fund (IMF) and World Bank. Those factors are putting the nation “on track to allow a full reopening of the economy fairly soon.”
Still, Powell said many Americans who are out of work will struggle to find new jobs because some industries will likely be smaller than they were before the pandemic. In other cases, employers are seeking to use technology instead of workers where possible, he said.
“It’s important to remember we’re not going back to the same economy,” Powell said. “This will be a different economy.”
Powell spoke along with other global economic leaders during the meetings of the two global lending agencies. The roundtable discussion also addressed an emerging trend of wealthier nations recovering much faster from the pandemic than poorer countries, in part because of much faster vaccinations.
Ngozi Oknojo-Iweala, director general of the World Trade Organization, said the unequal distribution of vaccines could threaten the global economic recovery. Just 0.1% of vaccines have gone to low-income countries, she said.
“If we don’t do something to change the pace at which the poorer countries are getting access to vaccines, it will take a long time to get to herd immunity for the world,” Oknojo-Iweala said. That, in turn, could threaten those nations already vaccinated, by spreading new variants that could push up case counts and reverse economic progress in wealthier countries.
On Tuesday, the IMF boosted its economic forecast for global economic growth this year to 6%, up from a projection of 5.5% in January. The increased growth is seen coming in large part from accelerated vaccine rollouts and the $1.9 trillion rescue package the Biden administration pushed through Congress last month.
IMF Managing Director Kristalina Georgieva told reporters Wednesday that without the massive amounts of support provided by governments, last year’s recession, the worst since World War II, would have been three times more severe.