More work to be done to get U.S. economy back on strong footing

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Washington, Aug. 3 - The labor market will take time to heal from the effects of the COVID-19 pandemic and more must be done for the U.S. economy to get completely back on track, Federal Reserve Governor Michelle Bowman said on Tuesday.

Despite the recent positive pace of hiring, employment is still far below where it was. I am hopeful that we will continue to build on this encouraging momentum, since there is more work to be done to get the economy back on strong footing, Bowman said in prepared remarks for a conference on fostering an inclusive economic recovery.

On Tuesday, San Francisco Fed President Mary Daly has echoed those sentiments, by pointing out there are almost 10 million people who are unemployed and more from the sidelines of the labor market.

Those views diverge with other officers at the Central Bank as the interest rate setting committee mulls when to start withdrawing some of the extra monetary support designed to help the U.S. economy recover from the health crisis.

In recent days, Fed Governor James Bullard and St. Louis Fed President Christopher Waller both said that the job market recovery was fast approaching completion and that the Fed should begin reducing its billions of monthly bonds sooner rather than later.

The Fed has said that it would begin to taper when flexibility has been achieved when substantial progress toward reaching its maximum employment and flexible inflation goals have been achieved.

Bowman noted that in November almost half of workers with a college degree or more said that they worked completely from home compared to 10% of workers with a high school degree or less and that the disproportionate impact of pandemic on Hispanic and Black workers reversed their recent employment gains.

Currently, some people face difficult choices regarding the availability of jobs and changing lines of work. It might take time for some people to reenlist the labor force, Bowman said.