Yellen says Congress needs to 'go big' for relief package

FILE - This Dec. 13, 2017, file photo shows Federal Reserve Chair Janet Yellen speaking during a news conference following the Federal Open Market Committee meeting in Washington. Treasury Secretary Janet Yellen said Friday, March 5, 2021 that despite the strong job gains last month, Congress still needs to go big by passing President Joe Biden's $1.9 trillion relief package to get millions of people back to work sooner. (AP Photo/Carolyn Kaster, File) (Copyright 2017 The Associated Press. All rights reserved.)

WASHINGTON – Treasury Secretary Janet Yellen said Friday that despite the strong job gains last month, Congress still needs to “go big” by passing President Joe Biden's $1.9 trillion relief package to get millions of people back to work sooner.

In an interview with the PBS NewsHour on Friday, Yellen said 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. But with the administration's package, she said the country could see 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,” 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.”

Yellen said the unemployment rate, which fell to 6.2% in February, was overstating the improvement in the labor force because it does not count the 4 million people who have stopped looking for work and have dropped out of the job market. She said the real unemployment rate is 10%.

After House approval last week, the Senate is now debating the $1.9 trillion 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 U.S. financial markets over the past two weeks, as interest rates have started rising, 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 Biden's fiscal package makes its way through Congress.

The Federal Reserve “does have the tools to address inflation if it becomes a problem but I don't see markets ... worried about that,” Yellen said.