It is “far too early” to judge the strength of the recovery in the world’s largest economy as it reopens after extended coronavirus shutdowns, San Francisco Federal Reserve President Mary Daly told reporters on a conference call on Monday.
Infections across the United States are rising and governors in California, Florida and Texas are reinstating some restrictions to stem the tide of new cases.
From here, Daly said, the outlook will depend in large part on whether widespread shutdowns are again imposed or whether current mitigation strategies are enough to keep the virus in check but allow people to be back at their jobs.
“These are toes in the water … and we’ll see how this shapes up,” Daly said, adding that so far what she is seeing is “consistent with a slow and gradual recovery,” with unemployment bouncing around where it is now.
Fresh data on the labor market for June will be released on Thursday. Economists poll expect the jobless rate to fall to 12.3% from 13.3% in May.
A new large-scale shutdown, Daly said, would be much more worrisome and would result in a rise in unemployment.
Asked how she feels about the outlook, Daly said the characterization she would use is “curious.”
“I am really just watching the data, what is happening: it is far too early to tell, or to call it, at this point,” Daly said. “We have insufficient information to make that kind of judgment, in my opinion.”