US Worried About Economy's 'Permanent Scarring' From COVID-19 Crisis - Yellen

The US economy could end up permanently scarred by the coronavirus crisis, a predicament the Biden administration is trying to avoid with its $1.9 trillion COVID-19 relief bill, Treasury Secretary Janet Yellen said on Monday

WASHINGTON (UrduPoint News / Sputnik - 08th March, 2021) The US economy could end up permanently scarred by the coronavirus crisis, a predicament the Biden administration is trying to avoid with its $1.9 trillion COVID-19 relief bill, Treasury Secretary Janet Yellen said on Monday.

"We're really concerned about scarring, permanent scarring from this crisis and it's focused us very heavily on doing everything we can to get back on track as quickly as we can," Yellen said during a live-streamed International Women's Day dialogue with IMF Managing Director Kristalina Georgieva.

The� COVID-19 relief bill, which passed the Senate on Saturday, is due to become law after being amended this week on the issue of minimum wage by he House of Representatives. The legislation aims to provide US states with Coronavirus vaccination programs; make financial grants for small businesses; aid school reopenings; pay unemployment benefits of $300 weekly and send out one-time checks of $1,400 to most Americans.

The United States lost more than 21 million jobs between March and April, at the height of business lockdowns forced by the virus. At least 10 million of those jobs have not returned, with the US economy shrinking 3.5 percent in 2020 after a 2.2 percent growth in 2019.

Federal Reserve Chairman Jerome Powell said earlier that he did not expect the United States to return anytime this year to maximum employment, which will be one the central bank's criteria for raising interest rates. Under the Fed's definition, maximum employment is achieved when the jobless rate is at 4.0 percent or lower. February's US jobs report showed unemployment at 6.2 percent.

Since the COVID-19 pandemic broke out, the Fed has kept US interest rates at between zero and 0.25 percent and pledged not to raise them until it sees maximum employment and inflation consistently at above 2 percent per annum.