Yellen says Congress needs to ‘go big’ for relief package

Yellen says Congress needs to ‘go big’ for relief package
Federal Reserve Chair Janet Yellen speaking during a news conference (Carolyn Kaster/AP)

Treasury Secretary Janet Yellen says Congress still needs to “go big” by passing President Joe Biden’s 1.9 trillion dollar (£1.37 trillion) relief package to get millions of people back to work soon despite the strong job gains last month.

In an interview with the PBS NewsHour on Friday, Ms Yellen said Mr Biden’s package should not be trimmed just because the February jobs report showed 379,000 new jobs had been created, the best showing since October.

At that pace it would still take the country more than two years to get back to full employment, she said.

It is a big package but I think we need to go big now, and we can afford to go big

Janet Yellen

But with the administration’s package, she said the country could record a return to full employment by next year.

“It is a big package but I think we need to go big now, and we can afford to go big,” Mr Yellen said.

“The most important thing is to get our economy back on track and to help people get their lives back in order to make sure this pandemic does not permanently scar our workforce.”

Ms Yellen said the unemployment rate, which fell to 6.2% in February, was overstating the improvement in the labour force because it did not count the four million people who had stopped looking for work and dropped out of the job market. She said the real unemployment rate is 10%.

President Joe Biden is eager for the relief bill to pass as he looks to rebuild the US economy (Patrick Semansky/AP)

After House approval last week, the Senate is now debating the 1.9 trillion dollar relief package with supporters trying to keep Democrats on board in the 50-50 chamber since no Republican is expected to vote for the measure.

Asked about turmoil in US financial markets over the past two weeks, as interest rates have started rising, Ms Yellen said she does not view that development as a sign investors are starting to worry inflation is getting out of hand.

She said the rise in rates is a sign that prospects for the economy are starting to improve as more people are vaccinated and Mr Biden’s fiscal package makes its way through Congress.

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