WASHINGTON (AP) – A top official at the Federal Reserve criticized the decision by many states to open businesses this spring before the virus came under full control, saying these choices have hindered an economic recovery in the US
Eric Rosengren, president of the Federal Reserve Bank of Boston, said states in the South and West that allowed businesses to re-register after an short period of time recorded an initial burst of economic activity. But spikes in infestation prices soon followed and economies in those states now lag behind those in the Northeast Polder, as consumers have become more cautious and bars and restaurants in some states have reopened.
Rosengren’s comments, delivered online Wednesday, are some of the most specific yet by a Fed official linking the health of the economy to the nation’s ability to control the virus. Fed Chairman Jerome Powell has generally stressed that the recovery from the recession depends on the conquest of the pandemic, but Rosengren’s remarks delved into the sharp difference in infection rates, both within regions of the United States , and the US compared to Europe.
“Limited or inconsistent efforts by states to control the virus on the basis of public health guidance not only put citizens at unnecessary risk of serious illness and possible death – but are also likely to prolong the economic downturn,” Rosengren said in prepared remarks.
“Despite the major interventions by monetary and fiscal policy makers … the recovery could lose steam, as activities in many states are again restricted (officially or voluntarily) to slow the spread of the virus,” Rosengren said.
In Europe, “peoples” were more vigorous, kept restrictions longer, and did not reopen until the virus reached low levels, “Rosengren said.” In contrast, in the United States, infection rates continue to rise because states take protection measures too soon. lift, “said Rosengren.
As a result, real-time data shows that in Europe, visits to retail stores and recreational homes, such as cinemas and amusement parks, have recovered faster than in the United States and are closer to pre-pandemic levels, Rosengren said.
Rosengren also pointed to the high current savings rate in the United States as evidence that Americans are restless to spend, despite stimulus checks of $ 1,200 sent to most Americans in the spring, and additional federal unemployment benefits of $ 600 per week.
Closures from governments of many companies have discouraged consumer spending, but so has the individual choice to consider restaurants, cinemas, gyms and other public places that are considered to be as risky as the spread of viruses in parts of the country.
“As long as the virus poses major threats to public health, a complete economic recovery will be very difficult, as individuals, often voluntarily, avoid activities that endanger their health,” Rosengren said.
Other Fed officials have warned that the viral resurgence in July could delay the recovery of the US. And Dallas Federal Reserve President Robert Kaplan said last month that more widespread use of masks is slowing down infections and helping the U.S. economy.
“The path of the economy will depend significantly on the course of the virus,” Fed policymakers said in a statement issued. after their last meeting last month.
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