RICHMOND FED’S BARKIN: U.S. MAY BE ‘ON THE BRINK’ OF FULL RECOVERY

The US economy may be “on the brink of completing the recovery” from the recession triggered by the coronavirus pandemic, Richmond Federal Reserve President Thomas Barkin said, although risks remain for some workers, Howard Schneider reported for Reuters.

“Vaccines are rolling out, and case rates and hospitalizations are falling. Excess savings and fiscal stimulus should help fund pent-up demand from consumers freed by vaccines and warmer weather,” Barkin said in remarks prepared for delivery on Sunday evening to a Credit Suisse conference on investment in Asia.

“With this support, the economy has come most of the way back,” he said, with the recently enacted $1.9 trillion coronavirus federal relief program fueling a jump in household incomes and savings that helps offset the still-deep loss of jobs.

“I am hopeful that we are on the brink of completing the recovery,” Barkin said. As the health crisis eases, he said US officials should focus on how to ease the transition back to jobs for working parents and others displaced by the pandemic, bolster education to ensure students do not suffer from lost time in the classroom, and take other steps to prevent “scarring.”

“We should pay special attention to programs that allow primary caregivers to return to work. This includes support for child care, elder care and safely reopening schools,” he said.

One bright spot, he said, is that so many of the jobs lost during the crisis are in “high turnover occupations, such as housekeepers and waiters. Even before the COVID-19 pandemic, those workers changed jobs regularly,” a fact that might lessen the overall damage from long-term joblessness.

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