The economy is "much improved" since the CARES Act was enacted a year ago but the recovery is still "far from complete," Federal Reserve Chairman Jerome Powell said in remarks published Monday.
Marking the upcoming one-year anniversary of the landmark, $2.2 trillion Coronavirus Aid, Relief and Economic Security Act stimulus bill, Powell said in prepared congressional testimony that "the situation is much improved" since the first of what would become several COVID-19 economic rescue packages was approved.
But even though "the worst" was avoided by prompt action and the recovery now "looks to be strengthening," the country is still facing major economic challenges, according to the Fed chief's remarks to be delivered Tuesday to the House Financial Services Committee.
Powell and Treasury Secretary Janet Yellen are scheduled to testify before the panel in an oversight hearing mandated by the signing of the CARES Act on Tuesday.
Vulnerable parts of the economy such as the services sector "remain weak, and the unemployment rate -- still elevated at 6.2% -- underestimates the shortfall, particularly as labor market participation remains notably below pre-pandemic levels," Powell said.
In many respects, the recovery from COVID-19 has been faster than expected, with household spending rising quickly, the housing sector booming and business investment picking up.
Nearly 380,000 jobs were added in February, with the hard-hit leisure and hospitality sectors regaining about two-thirds of the jobs they lost in December and January.
But those positive numbers are not evenly distributed, Powell cautioned.
"We welcome this progress, but will not lose sight of the millions of Americans who are still hurting, including lower-wage workers in the services sector, African Americans, Hispanics, and other minority groups that have been especially hard hit," he said.