Economy healing, House told by Mnuchin, Powell
WASHINGTON -- The U.S. economy is regaining strength after this year's sharp, coronavirus-related downturn, but significant challenges remain, U.S. Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell told lawmakers Tuesday.
Appearing before the House Financial Services Committee, they highlighted efforts to limit job losses and to bolster American businesses.
Mnuchin listed a number of encouraging signs. Retail sales, for example, jumped 18% in May while the number of jobs increased by 2.5 million, he said.
Recent gains have been uneven, he noted.
"Certain industries, such as construction, are recovering quickly, while others, such as retail and travel, are facing longer impacts and may require additional relief," he said.
There is still money available from the Coronavirus Aid, Relief, and Economic Security Act, he noted.
"We have over $250 billion remaining to create or expand programs as needed," he said.
"We would anticipate that any additional relief would be targeted to certain industries that have been especially hard-hit by the pandemic, with a focus on jobs and putting all Americans back to work who have lost their jobs, through no fault of their own," he said.
The administration is committed to working with Congress this month "on any other further legislation that will be necessary," he said.
Asked about efforts by some creditors to garnish relief payments, Mnuchin said he agrees that it shouldn't be allowed. He lacks the authority, on his own, to outlaw the practice, he told lawmakers.
During his testimony, Powell said the nation is facing "extraordinary challenges."
Although businesses are reopening, hiring is resuming and spending is increasing, coronavirus flare-ups would unleash additional financial hardship, he warned.
"The path forward for the economy remains extraordinarily uncertain and will depend in large part on our success in containing the virus. A full recovery is unlikely to occur until people are confident that it is safe to engage in a broad range of activities," he said.
While Mnuchin heralded the number of jobs recently gained, Powell emphasized the number of jobs that are still needed.
"While recent economic data offer some positive signs, we are keeping in mind that more than 20 million Americans have lost their jobs, and that the pain has not been evenly spread. The rise in joblessness has been especially severe for lower-wage workers, for women, and for African-Americans and Hispanics," he said. "This reversal of economic fortune has caused a level of pain that is hard to capture in words as lives are upended amid great uncertainty about the future."
Listing several of the lending initiatives already underway, Powell promised to do as much as possible to help restore the nation's economy.
"The Federal Reserve is strongly committed to using our tools to do whatever we can for as long as it takes to provide some relief and stability to ensure that the recovery will be as strong as possible and to limit lasting damage to the economy," he said.
"The Fed will continue to use these powers forcefully, proactively and aggressively until we're confident that the nation is solidly on the road to recovery," he said. "When the time comes, after the crisis has passed, we will put these emergency tools back in the toolbox."
Powell wore a mask throughout the proceedings. Mnuchin removed his during his testimony.
Committee members also wore masks and socially distanced themselves throughout the roughly two-hour meeting. Afterward, U.S. Rep. French Hill, R-Ark., who serves on the committee, greeted Powell briefly.
Unlike some of the others, he didn't offer Powell an elbow bump.
Hill, who serves on a Congressional Oversight Commission overseeing covid-19 lending, portrayed Tuesday's discussions as positive.
"Secretary Mnuchin and Chairman Powell both, again, demonstrated their flexibility in adopting the CARES Act facilities to help the economy get back to full capacity," Hill said.