Wearing marks, social-distancing could lead to “enormous economic gains”

US Federal Reserve Chairman Jerome Powell said that wearing masks and social-distancing measures could lead to “enormous economic gains” for the US economy.

“So certainly to get us back to full employment, we’re going to need to get the spread of the disease under control. And the best way to do that, short of arriving at a vaccine, is to take these social-distancing measures and employ them,” Powell said in an interview with National Public Radio on Friday, Xinhua news agency reported.

“There’s actually enormous economic gains to be had nationwide from people wearing masks and keeping their distance,” he said.

Powell’s remarks came after the Labor Department reported earlier Friday that US employers added 1.4 million jobs in August and the unemployment rate dropped to 8.4 per cent.

“While we’ve gotten something like 11 million people back to work, there’s still another 10 or 11 (million) who are not back to work,” Powell said, adding it will take a long time for the labour market to fully recover from the pandemic.

“In a sense, those may be some of the harder jobs to find because there are some parts of the economy that will take longer to recover. So travel, entertainment, hotels, things like that,” he said.

Powell also said the central bank will keep short-term interest rates at the record-low level of near zero for a long period to support the economic recovery.

“We think that the economy’s going to need low interest rates, which support economic activity for an extended period of time,” he said. “It will be measured in years … we’re not going to prematurely withdraw the support that we think the economy needs.”

The Fed cut interest rates to near zero at two unscheduled meetings in March and began purchasing massive quantities of US treasuries and agency mortgage-backed securities to repair financial markets. It also unveiled new lending programs to provide up to US $2.3 trillion to support the economy in response to the coronavirus outbreak.