By Paul Kiernan
Federal Reserve Chairman Jerome Powell welcomed last week's report showing robust U.S. job creation in March but said the central bank still needs to see significant improvement in the economy before dialing back policy support.
"We got a taste of what faster progress will look like with the March employment report: close to a million jobs," Mr. Powell said Thursday in a seminar on the global economy hosted by the International Monetary Fund. "We want to see a string of months like that so we can really begin to show progress toward our goals."
Fed officials have indicated in recent weeks that they expect to hold U.S. short-term interest rates near zero through 2023. They also plan to continue the Fed's $120 billion of monthly bond purchases until the economy makes "substantial further progress" toward its goals of maximum employment and sustained, 2% inflation.
The IMF lifted its forecast for world economic growth this year to 6%, up from a projection of 5.5% in January. That would mark the fastest pace of expansion in at least four decades, helped by a rapid rollout of Covid-19 vaccines and trillions of dollars of relief spending by rich countries' governments.
The IMF projected the U.S. economy will expand 6.4% this year and regain its pre-pandemic size after an estimated contraction of 3.5% last year.
Mr. Powell's comments came after several of his colleagues at the central bank have become more upbeat about the economic outlook, while also pointing to considerable remaining uncertainties.
Inflation has remained below the Fed's 2% target for most of the past decade, while the U.S. labor market remains about 8.4 million jobs short of its pre-pandemic level of employment. Public-health officials have depicted the global vaccination campaign now under way as a race against variants of Covid-19 that could prove more virulent or resistant to vaccines that have already been developed.
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(END) Dow Jones Newswires
April 08, 2021 13:43 ET (17:43 GMT)Copyright (c) 2021 Dow Jones & Company, Inc.