MNI TRANSCRIPT: Powell on Jobs Recovery, Virus Second Wave

     WASHINGTON (MNI) - The following is the portion of a transcript from

Federal Reserve Chairman Jerome Powell's press conference on Wednesday:

     Q: Chairman Powell I'm going to pick up on what Scott was asking a moment

ago. You have been studious about threading this needle in the interviews you've

given and speeches and colloquy that's followed. There's likely to be a need for

more fiscal stimulus for policy in the future. I'll try a hypothetical here. If

you find yourself in a senator's office and he held up that May unemployment

report ha you described as unexpectedly positive and a welcome surprise, this is

an occasion to put on the brakes, I wonder what you would say, this message is

how unprecedented it is, about how much urgency there is in dealing with this

and if you've seen that from the Federal Reserve. I wonder if you worry that

sense of urgency isn't matched and what the consequences of that might be.

There's a fear the [indiscernible] and through the summer to see what happens

here in substantive reports. A quick second question. You talk about your fear

of a second wave of this disease, and it strikes me there's a difficulty here

with definition. You talked about us weathering this crisis and getting through

this storm. It seems too me with the chatter there isn't agreement on what

getting through this means. You have an administration now inclined to if not

direct but be content with states opening up the economies perhaps too early.

How problematic is that from a policy perspective not having agreements on what

it means to have defeated this virus or gotten -- I want to be clear about the

picture.

     A: I want to be clear about one way to look at the picture really, and that

is this. You can get at this by looking at the widest measure of unemployment,

the labor market slack if you will is the U-6 measure. The one we talk about all

the time is called you HOOI 3 by economists, and the one that has a much broader

measurement of slack in the economy in U-6. The level tripled from 7% to 21%.

That amounts to 22 million additional people who are -- who have lost work in

the economy either by going to part-time or something like that. That's in the

low 20s. That's post the May unemployment report. Go at it a different way. Look

at the regular unemployment rate and take the 21 people listed as unemployment

now, you can add more on for the ones miscoded and take the people suddenly out

of the labor force and put them together, that has gone up by 24 million. Those

are two different measures of what happened. The question is, 22, 24 million

people, got to get them back to work. Somehow we have to as a country get them

back to work. They didn't do anything wrong. This was a natural disaster. I

think the responses so far have been great. If you think -- I would just in

terms of the May employment report, it's so nice to see. People thought you

would start to get those back-to-work kind of numbers in June, July and August.

Very few people saw them in May. Almost no one did, but it did. We don't know

what it means, whether it's a timing change or prove to be much more than that.

We have to wait and see. As I mentioned earlier, it is clear evidence how

uncertain things are and how humble you have to be. Bottom line, I would say the

key thing people need to understand is there's a lot of work to do in the labor

market. We're going to stick with in and support that until the work is done.

That is something we're going to do with all of our tools. I think it may RIERT

Congress to help as well. It may, but that's going to be their decision. You

also asked about the second wave. So we have major responsibilities and policy

tools, but the decision about when to re-open the economy is one for elected

officials at the state and local and federal level. So if they asked I didn't

have any particular expertise at the fed or coronaviruses or anything like that.

We talk to experts. We don't have anything special to add on that. I would say

it's self-evident, I think, if it happens, you know, the issue would be, first

of all, people's health. But secondly, you could see a public loss of confidence

in parts of the economy that will be already slow to recover. It could hurt the

recovery, even if you don't have a national level pandemic. Just a series of

local ones, of local spikes could have the effect of undermining people's

confidence in travelling, in restaurants, and in entertainment. Anything that

involves getting people together in small groups and feeding them and flying

them around could be hurt. It would not be a positive development, and I'll just

leave it at that.

--MNI Washington Bureau; +1 202 371 2121; email: ryan.hauser@marketnews.com

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