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Federal Reserve Chair Jerome Powell said the economy has shown sustained but uneven improvement while highlighting "elevated" unemployment and temporary inflation pressure, in remarks published Monday ahead of a Congressional hearing on Tuesday.
"As with overall economic activity, conditions in the labor market have continued to improve, although the pace has been uneven," Powell said in the text of opening remarks for a House of Representatives pandemic subcommittee.
"The unemployment rate remained elevated in May at 5.8%, and this figure understates the shortfall in employment, particularly as participation in the labor market has not moved up from the low rates that have prevailed for most of the past year," Powell said. "Job gains should pick up in coming months as vaccinations rise," he said, though a slowing rate of vaccinations remains a risk to the economy.
"Inflation has increased notably in recent months" on base effects, the economy re-opening, and supply constraints, Powell said. "As these transitory supply effects abate, inflation is expected to drop back toward our longer-run goal."
The remarks didn't include anything on the shift to open a debate about scaling back QE, worth USD120 billion a month. "We at the Fed will do everything we can to support the economy for as long as it takes to complete the recovery," he said to end his remarks.