Fed officials say U.S. economy still in depths of recession, more relief needed

FILE PHOTO: The Federal Reserve building is pictured in Washington, DC, U.S., August 22, 2018. REUTERS/Chris Wattie/File Photo/File Photo

(Reuters) - The U.S. economy is still deep in a recession and more fiscal relief will be needed to reach a full recovery and help some of the unemployed find jobs, two Federal Reserve policymakers said on Monday.

“We’re still in the depths of a recession,” Boston Fed Bank President Eric Rosengren said during a virtual discussion about uneven outcomes in the labor market. “I hope over the course of the spring we’re really talking about a significant recovery.”

Still, more work is needed to help the millions of people who lost jobs during the pandemic, and the pace of the recovery will depend on what happens with the coronavirus and the steps employers take to restructure jobs after the crisis, Rosengren said.

Atlanta Fed President Raphael Bostic echoed those concerns during the virtual discussion, agreeing that some unemployed people - particularly low-income workers - will need added help finding new jobs.

“There are still many sectors and many communities where recovery is going to be a long way off,” Bostic said.

Fed officials pledged at last week’s policy-setting meeting to continue supporting the economy by keeping interest rates at near-zero levels and purchasing $120 billion a month in bonds.

“The first thing we can do is do everything in our power to get back to full employment as quickly as possible,” Rosengren said, adding that there is a role for more fiscal relief when interest rates are near zero.

“I don’t want to say that the burden is all on monetary policy,” Rosengren said. “Most of the burden is actually on fiscal policy when interest rates are as low as they are.”

Reporting by Jonnelle Marte; Editing by Leslie Adler and Jonathan Oatis