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The coronavirus pandemic has likely pushed the nation’s unemployment rate to 20 percent, and it could remain persistently high at the end of the year, according to Boston Federal Reserve Bank President Eric Rosengren.
Rosengren said he expects unemployment to remain well above the pre-crisis level of 3.5 percent at the end of 2020 even as states begin to roll back stay-at-home guidelines adopted earlier this year to slow the spread of the virus.
“At the end of the year, I still expect the unemployment rate to be double digit, which is going to be a recovery from where we’re at,” Rosengren told FOX Business’ Edward Lawrence during an exclusive interview. “But it’s certainly not going to be a recovery back to full employment by the end of the year.”
Rosengren said the nation’s jobless rate could return to full employment by the end of 2021, but said that hinges on whether the U.S. can successfully contain the virus.
“If we’re relatively successful in controlling the pandemic, if we get medical solutions either with new medicine or a vaccine, that’s a very different outcome than if we don’t get those things,” he said. “And in particular, if we were to have another sharp increase in the fall in people that are becoming infected and we had to have shutdowns in some parts of the country, that’s going to prolong the economic pain as well.”
His remarks came on the heels of a Labor Department report showing nearly 39 million Americans have lost their jobs since the virus gained a foothold in the U.S., a rate unseen since the Great Depression.
In April, the unemployment rate officially increased to 14.7 percent, according to Labor Department data.
Although Rosengren called it “good news” if states begin to reopen their economies “safely and responsibly,” he said the recovery from the pandemic depends on whether Americans are willing to go out and spend money. Consumer spending accounts for two-thirds of the nation’s GDP.
“We need consumers to feel confident they can spend, shop, go to museums, go to see movies,” he said. “We’re not there yet. And hopefully we’ll get there soon, but we have a ways to go.”