Richmond Fed’s Barkin: US may be ‘on the brink’ of a full recovery


FILE PHOTO: Richmond Federal Reserve Bank President Thomas Barkin poses during a break at a Dallas Fed technology conference in Dallas, Texas, USA, May 23, 2019. REUTERS / Ann Saphir / File Photo

WASHINGTON (Reuters) – The US economy could be “on the brink of completing the recovery” from the recession triggered by the coronavirus pandemic, Richmond Federal Reserve Chairman Thomas Barkin said on Sunday, although some workers remain at risk.

“Vaccines are being implemented and case rates and hospitalizations are decreasing. Excess saving and fiscal stimulus should help fund pent-up consumer demand unleashed by vaccines and warmer weather, ”Barkin said in remarks set to be delivered Sunday night at a Credit Suisse investment conference. in Asia.

“With this support, the economy has recovered most of the way back,” he said, and the recently enacted $ 1.9 trillion federal coronavirus assistance program fueled an increase in household income and savings that it helps to offset the still profound loss of jobs.

“I am hopeful that we are about to complete the recovery,” Barkin said.

As the health crisis eases, he said U.S. officials should focus on easing the transition back to work for working parents and others displaced by the pandemic, strengthening education to ensure students don’t suffer from time wasted in the classroom and take other action. to avoid “scars”.

“We must pay special attention to programs that allow primary caregivers to return to work. This includes support for child care, elderly care and safe reopening of schools, ”he said.

One positive aspect, he said, is that 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 were changing jobs regularly, ”a fact that could reduce the overall damage of long-term unemployment.

Telecommuting can also allow for faster matching between workers and jobs because those with the right skills will not necessarily have to relocate.

Once the pandemic passes, he said officials should focus on “letting market forces work” so that government policy does not “hinder the creation of the companies of tomorrow by trying to protect the companies of today.”

Reporting by Howard Schneider; Editing by Peter Cooney

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