More people going back to work is only positive news if it can be done safely and in the long term, Boston Fed President Eric Rosengren indicated in remarks to the Greater Providence Chamber of Commerce on Friday (June 19). However, he acknowledged that U.S. employment is at 13.3 percent, which marks a large rise from February through all age groups.
“If workplaces reopen without the necessary health precautions, the recent increases in payroll employment could be offset by possible business closures and serious health outcomes later,” Rosengren said. “If reopening can be done in ways that protect public health, then better outcomes now will also translate to better outcomes in the future.”
Rosengren noted that COVID-19’s economic impact is very much linked with how the country can control the pandemic. But he said current efforts have not been particularly effective. “If there are significant flare-ups in states that have aggressively reopened, the reduction in social distancing that contributes to stronger economic performance in such states now may translate to more depressed economic activity and increased public health issues in those states in the future,” the official said.
Rosengren also indicated that it is probably that the economic recovery in the second part of 2020 is below what was wished for when the health crisis began because of the coronavirus’s ongoing spread and rise in cases in a number of states. He foresees that the unemployment rate will remain at “double-digit levels at the end of the year.”
In terms of the Main Street Lending Program, Rosengren said the effort is off to a good start. While Rosengren noted that the program remains in its “early days,” he said there is a “steady stream of interest.”
As previously reported, The Federal Reserve was to roll out the Main Street Lending Program, which was designed for mid-sized companies in early June. At the time, it was noted that runs will run from $500,000 to $25 million.
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