Richmond Fed Barkin: The US may be “on the brink” of a full recovery

WASHINGTON (Reuters) – The US economy may be “on the verge of completing recovery” from the recession triggered by the coronavirus pandemic, said Thomas Barkin, president of the Richmond Federal Reserve, although risks remain for some workers .

“Vaccines are being rolled out and the number of cases and hospital admissions is declining. Excess savings and fiscal stimulus should help finance pent-up consumer demand liberated by vaccines and warmer weather, ”Barkin said in comments prepared for delivery Sunday night at a Credit Suisse conference on investment in Asia.

“With this support, the economy has largely returned,” he said, as the recently implemented $ 1.9 trillion federal coronavirus program has fueled a jump in household income and savings, offsetting still deep job losses.

“I am hopeful that we are on the verge of finalizing the recovery,” said Barkin.

As the health crisis recedes, he said US officials should focus on facilitating the transition to jobs for working parents and others displaced by the pandemic, strengthen education to ensure students don’t suffer from wasted time in the class, and take other steps. to prevent “scars”.

“We need to pay special attention to programs that allow primary care providers to return to work. This includes support for childcare, elder care and the safe reopening of schools, ”he said.

One bright spot, he said, is that so many jobs lost during the crisis are related to high turnover professions such as housekeepers and waiters. Even before the COVID-19 pandemic, those workers regularly switched jobs, ”a fact that could lessen the overall damage from long-term unemployment.

Telecommuting can also allow for faster reconciliation between workers and jobs, as those with the right skills don’t necessarily have to relocate.

Once the pandemic is over, he said officials should focus on “making market forces work” so that government policies “don’t hinder the creation of tomorrow’s businesses when trying to protect today’s businesses.”