(PatrioticPost.com)- The American economy as we’ve come to know it could be no longer, Federal Reserve Chairman Jerome Powell said on Thursday.
“We’re recovering, but to a different economy,” he said as part of the European Central Bank Forum on Central Banking.
The COVID-19 pandemic has accelerated some already-existing trends in both society and the economy. With more people working from home, the increased use of technology and automation has become even more pronounced. And Powell said this will have a lasting effect on how people work and live.
Generally speaking, advances in technology are seen as a positive for a society over time, according to Powell. Short-term, though, they cause disruption. As markets adjust to whatever the “new normal” is, the pain caused by the disruption isn’t shared equally across the society.
Powell said lower-paid employees are the ones who are likely to take the brunt of it with this increased use in technology. That’s because they are the ones who hold the jobs that require face-to-face interactions such as those who work at restaurants or in retail.
Those positions are heavily occupied by minorities and women, Powell said, and they’ll be the ones most likely to be affected by long-term layoffs from the pandemic, or outright elimination of positions.
In addition, the pandemic has placed an extra burden on women, who unequally have been forced to leave the workforce to care for children who no longer have child care options. Children also aren’t getting the same education they once had with virtual learning, Powell said.
All of this inequality is something that, generally speaking, holds an economy back. Powell explained:
“Even after the unemployment rate goes down and there’s a vaccine, there’s going to be a probably substantial group of workers who are going to need support as they’re finding their way in the post-pandemic economy, because it’s going to be different in some fundamental ways.”
For months now, Powell has said the economy could use a boost from the federal government through another economic stimulus package. He has also stressed that the Federal Reserve may need to step up and try to do even more than it’s already done.
On Thursday, he said:
“My sense is that we will need to do more and that Congress will need to do more.”
While the development of a vaccine looks promising, especially with recent positive news from clinical trials, Powell said there’s still a lot of questions that remain. One is how the virus is surging around the world, not just in the United States.
“The main risk we see today … is the further spread of the disease here in the United States,” Powell said.
Many states around the country have reinstated pandemic-related restrictions to try to curb the spread of the virus. For now, these restrictions have been localized, but it’s possible that if the spread continues to worsen, much of the country could enter another full-blown lockdown.
And as we saw in the spring, that could be devastating for an economy already on the edge.