MNI TRANSCRIPT: Powell on Long-Term Unemployment Forecast

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

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

     Q: In the projection you didn't change -- the policy makers didn't CHAK

their forecast for long-run unemployment, so that suggested you -- you know,

that all of you so far don't see necessarily prospects for long-term damage.

Still, what kind of data are you looking at here to gauge, you know, the

potential for longer-term hits to the economy even as we have something like the

May jobs reports that still has at the same time people return from temporary

layoff. There can be permanent job losses. What kind of data do you look at to

gauge that potential impacts, and what is...?

     A: I think it's the risk over time of lasting damage to these -- you know,

to the productive capacity of the United States typically in TW forms of the

extended employment and they get out of touch with skills they need and they

have a hard time getting back in. You know, it's very damaging to people's lives

and their working lives. It also just lowers in a way and can increase the --

you know, the unemployment rate but can lower the labor force participation

rate, which is worst to have people dropping out of the labor force. The other

people of it is just businesses. A shock like this that comes in, it's like a

natural disaster. You wouldn't want a lot of perfectly good businesses, smaller

and medium-sized businesses without a lot of resources to stain them to go out

of business permanently in a SWIKS like that or that when there was no reason

for it. Of course, businesses go in and out and fail all the time and that's

a... [a] thing and has to happen. This is different. Those are the things we're

worried about. We didn't change our longer-run estimate of potential growth and

of the unemployment rate, and I would say in my thinking the reason I didn't

change mine is that I still -- I think we can avoid that or much of that, most

of that even. We do that with measures that, you know, keep people in their

homes that support hiring, that support growth, that avoid unnecessary,

avoidable business insolvent sees. That's all the things we're trying to do. If

you look at what's happened, there's something somewhere short of 25 million

people have been displaced even after the good May employment report. This is

the environment in which they have the best chance to go back to their old job

or get a new job. That's the most important part of the exercise. It's probably

hopeful at this point to say we won't have longer run damage to the economy and

these numbers won't change. I think it's way too early to be changing longer --

see, these are not meant to the short run numbers. They're longer run

assessments. So I would -- I have not changed mine, and I'm hopeful I won't have

to change it.

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

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