ARI SHAPIRO, HOST:
The Federal Reserve promised once again today to help support the U.S. economy through this crippling pandemic with all the tools at its disposal. That includes leaving interest rates near zero for the foreseeable future. Speaking to reporters this afternoon, Fed Chairman Jerome Powell said recent economic gains could be jeopardized by a summer surge in coronavirus infections.
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JEROME POWELL: The pace of the recovery looks like it has slowed since the cases began that spike in June.
SHAPIRO: Powell also warned that it could be a long slog back to full employment. NPR's Scott Horsley joins us now.
Hi, Scott.
SCOTT HORSLEY, BYLINE: Good to be with you, Ari.
SHAPIRO: Chairman Powell and his colleagues say they are watching the economy closely. What are they seeing?
HORSLEY: You know, they're looking at traditional measures like the GDP report that comes out tomorrow morning or the monthly jobs numbers that'll be out next week, but they're also paying close attention to more real-time measures like credit card receipts and restaurant reservations. Those untraditional measures can sometimes give you an early warning sign when there's a shift in the economy, and Powell and his colleagues began to see a shift in recent weeks. As the number of coronavirus infections started going up, consumer spending appeared to be going down. The pace of hiring also seems to have slowed. It's not certain, but it looks like what began as a pretty rapid recovery from the recession has definitely hit a speed bump.
SHAPIRO: Powell spoke as Congress is considering another round of economic relief for the country, including some extension of unemployment benefits. What did he have to say about that?
HORSLEY: Well, he said that even under the best of circumstances, you're going to have millions of people out of work for what could be a long time. And he said they're going to need some support. He also said that the previous rounds of aid that Congress authorized were really helpful, both in cushioning the blow for those families but also in cushioning the broader economic downturn. Otherwise, the recession would have been even worse.
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POWELL: When you see the spending that's happening, when you see small businesses staying in business, you are seeing what happens with that money. And so, in a broad sense, it's been well-spent. It's kept people in their homes. It's kept businesses in business. And that's all a good thing.
HORSLEY: The Fed chairman's always careful to stay in his lane and not tell Congress what to do, but he did make it clear that some additional help for people who are out of work will help hurting families and also the broader economy.
SHAPIRO: This year, obviously, public health and the economy are closely connected. What did the central bank have to say about that?
HORSLEY: Yeah, Powell and his colleagues added some language to their official statement this afternoon making that connection explicit and basically saying the only way we're going to get to a sustained economic recovery is to beat the pandemic.
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POWELL: The path of the economy is going to depend, to a very high extent, on the course of the virus and on the measures that we take to keep it in check. That is just a very fundamental fact about our economy right now. The two things are not in conflict. You know, social distancing measures and fast reopening of the economy actually go together. They're not in competition with each other.
SHAPIRO: And finally, Scott, I want to ask you about something that I've noticed at supermarkets and I'm sure a lot of other people have as well, which is that if you're paying for cash, places have a hard time making change because of a coin shortage. The Federal Reserve distributes coins. What's going on there?
HORSLEY: Yeah, it's not really a shortage per se, but pennies, nickels, dimes - they're just not circulating the way they usually do. Instead, they're piling up on people's dressers and in the cash drawers of shuttered businesses. It's just another symptom of how the pandemic has interrupted our usual cash flow. Powell says the Fed has formed a task force that is working on this. And last week, the Mint put out an unusual public appeal, urging Americans to either spend your coins or take them to the bank and cash them in, take them to one of those supermarket kiosks. The Mint said the coin shortage can be solved by each of us doing our part, Ari.
SHAPIRO: NPR chief economics correspondent Scott Horsley.
Thanks, Scott.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.
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