MNI BRIEF: Powell Tells Congress Recovery Far From Complete

The economic situation is "much improved" relative to a year ago, but the recovery is far from complete and the Federal Reserve will "continue to provide the economy the support that it needs for as long as it takes," Chair Jay Powell wrote in testimony to Congress.

Sectors of the economy most adversely affected by the resurgence of the virus remain weak and the unemployment rate is still elevated at 6.2% -- and that still underestimates the shortfall, particularly as labor market participation remains notably below pre-pandemic levels, Powell said. Fed officials have told MNI the central bank will keep easy policy until data shows improvements in the labor market, with a preference for seeing broad-based gains.

Powell said the economy's path still depends on the course of the virus, adding indicators of economic activity and employment have turned up recently. "The recovery has progressed more quickly than generally expected and looks to be strengthening," he said. Fed Chair Jay Powell is set to testify alongside Treasury Secretary Janet Yellen before Congress at noon EST Tuesday.