“The expansion is still far from complete,” Powell said in a speech to the National Association for Business Economics, a group of corporate and academic economists. “Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses. Over time, household insolvencies and business bankruptcies would rise, harming the productive capacity of the economy, and holding back wage growth.”

Powell noted that the economic recovery has slowed in recent months compared with its rapid improvement in May and June. Incomes fell in August. And job growth weakened in September, slowing to just 661,000, less than half the gains of 1.5 million in August and 1.8 million in September. The economy has recovered only slightly more than half the 22 million jobs that were lost in March and April.

“A prolonged slowing in the pace of improvement over time could trigger typical recessionary dynamics, as weakness feeds on weakness,” he said.

During a question-and-answer session with economists, Powell noted that the pandemic recession has disproportionately harmed in-person service industries, especially restaurants, bars, hotels, travel companies, movie theaters and other entertainment venues. The heavy damage to those industries has left millions of people unemployed, likely for an extended period, until they are either finally recalled to their previous jobs or switch to new careers.

“The right thing to do and the smart thing to do in the long run is to support those people as they return to their old jobs or find new jobs,” the chairman said.

In recent months, in speeches and in testimony to Congress, Powell has repeatedly urged lawmakers to enact an additional economic aid package. Fed chairs typically avoid inserting themselves into policy debates, but Powell has stressed that the Fed can only lend money to help spur growth.

Actual spending — further

(Reuters) – The S&P 500 and the Nasdaq retreated on Tuesday as Federal Reserve Chair Jerome Powell warned the U.S. economic recovery remained far from complete, with a selloff in some of the biggest technology companies also weighing on sentiment.

The U.S. flag is seen outside of the New York Stock Exchange (NYSE) in New York City, U.S., September 21, 2020. REUTERS/Andrew Kelly

The domestic rebound could still slip into a downward spiral if the coronavirus is not effectively controlled and growth sustained, Powell said, in a call for more help to businesses and households.

“Markets are worried about what the Fed knows that we don’t know,” said John Augustine, chief investment officer at Huntington National Bank in Columbus, Ohio.

“The things that are obvious to us are that small businesses are closing and unemployment remains high in the services sector. The Fed aggressively wants to address both of those with more fiscal stimulus.”

Comments from officials that a stimulus deal was still possible had lifted the three main stock indexes on Monday, helping them recoup losses from last week that were sparked by news that President Donald Trump had contracted COVID-19.

Trump returned to the White House on Monday from the Walter Reed Medical Center military hospital, but faced fresh backlash for removing his mask upon his return and urging Americans not to fear the disease that has killed more than 209,000 in the United States.

House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin spoke by phone on Monday about fresh relief measures and were preparing to talk again on Tuesday.

Seven of the 11 major S&P sectors were up, with gains led by the battered energy sector.

A rotation into value-linked sectors such as industrials also boosted the blue-chip Dow, but the Nasdaq slipped further away from

(Bloomberg) — U.S. equity futures fluctuated and Treasuries were steady before a speech by Federal Reserve Chair Jerome Powell on the outlook for the economy.

The Europe Stoxx 600 Index rose, led by gains in banks and travel shares advanced. Hardware maker Logitech International SA slumped as Apple Inc. plans to launch its own audio products and stop selling rival headphones.

The pound weakened after a report that the European Union has no plans to offer concessions to Boris Johnson before next week’s Brexit deadline. The bloc is ready to let U.K. talks drag on into November or December, and even take a chance on Johnson pulling the plug on the deliberations rather than compromise on its red lines, according to a senior EU diplomat.

chart, line chart: Bullion-backed ETF holdings hit record even as spot prices lag

© Bloomberg
Bullion-backed ETF holdings hit record even as spot prices lag

After the S&P 500’s biggest advance in almost four weeks yesterday, investors seem to be taking a break to digest new information. Powell and European Central Bank Chief Economist Philip Lane are set to deliver the keynote addresses at a meeting by the National Association for Business Economics on Tuesday.


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In recent weeks, Fed officials have stressed that the U.S. recovery is highly dependent on the nation’s ability to better contain infections, and that further fiscal stimulus is likely needed to support jobs and incomes.

There are also lingering concerns about the trajectory of the pandemic and its effect on the economy. In Germany, new coronavirus cases jumped the most since mid-April and Italy is set to tighten restrictions to curb the spread of the virus.

“The momentum of the recovery is clearly fading now and the positive surprises have ended,” according to strategists at Dutch asset manager Robeco. “With winter approaching in the northern hemisphere, we are already seeing more