In a statement the President of the Richmond Federal Reserve said, the U.S. economy may be “on the brink of completing the recovery” from the recession that was triggered by the coronavirus-induced COVID-19 pandemic.
“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,” said Thomas Barkin in remarks for a Credit Suisse conference on investment in Asia. “With this support, the economy has come most of the way back”.
“I am hopeful that we are on the brink of completing the recovery,” said Barkin.
With an increase in vaccinations and the health crisis easing, “U.S. 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”, said Barkin while adding, “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”.
One of the bright spots, is that many of the jobs lost during the pandemic are in “high turnover occupations, such as housekeepers and waiters. Even before the COVID-19 pandemic, those workers changed jobs regularly,” he said; this might lessen the overall damage from long-term joblessness.
Teleworking may also allow quicken the matching between workers and jobs since those with the right skills will not necessarily have to relocate. Once the pandemic passes, officials should focus on “letting market forces work” so that government policy does not “hinder the creation of the companies of tomorrow when trying to protect the companies of today” said Barkin.