By Jonnelle Marte
(Reuters) -The U.S. economy still has a long way to go to fully recover from the crisis caused by the coronavirus pandemic, which hit minorities and people with lower levels of education hardest, but the outlook is improving, Cleveland Federal Reserve Bank President Loretta Mester said on Thursday.
“While the economy is still far from our policy goals of maximum employment and price stability, progress is being made and the economic outlook is brightening,” Mester said during a virtual event with students from Swarthmore College.
On the inflation front, the Fed official said price readings could be high in the near-term as companies struggle with supply chain disruptions and prices rebound from lows reached early in the pandemic, but price growth is likely to slow as time passes and those challenges are resolved.
“I’m not too concerned about inflation moving too high at this point,” Mester said.
The U.S. economy could see strong growth in the second half of the year and labor market conditions should continue to improve as long as there is not a surge in infections of virus strains that are resistant to vaccines, Mester told reporters after the event.
The policymaker expects the U.S. economy to grow by 6% or more this year and the unemployment rate to drop to 4.5% or lower by year-end.
Vaccinations, which make it safer for people to return to work, will be an important part of the recovery, she said. Parents who stopped working because their children are home will need schools to reopen and access to childcare so that they can return to the workforce, Mester added.
(Reporting by Jonnelle Marte; Editing by Andrea Ricci and Karishma Singh)