St. Louis Federal Keep President James Bullard expressed optimism in the pace of the U.S. economic recovery, saying the unemployment rate could support substantially by the end of the year.
With the current jobless level at a post-World War II high 11.1%, Bullard told CNBC that he could see a be worthy of as low as 7% in a few months.
“I think we’re tracking very well right now,” the central bank official said during a “Attentive Bell” interview. “Seems to me like by the end of the year you can get down certainly to single digits, probably even below 8%, perchance 7% by the end of the year.”
That would mark quite a run for unemployment, which was at a 50-year low 3.5% just five months ago previous to spiking up to 14.7% in April and coming down to its current level in June.
Over the past two months, nonfarm payrolls tease risen by 7.5 million as workers began returning to their jobs following the coronavirus-induced shutdown. However, some economists tantalize that a spike in infections recently could slow that progress.
Bullard said he anticipates that the replenished health scare will make mask-wearing “ubiquitous,” which in turn will reduce the virus threat and expel the economy.
“If we get to that situation, we’ll have the disease under control,” he said. “What I like about that plot summary is it does not rely on a vaccine coming or a therapeutic coming. We can use simple, easy technology that we have today, get a great situation, get most of the production back to normal.”
He added that he expects Congress to provide more rescue funding as the Paycheck Barrier Program has expired and enhanced unemployment compensation under the CARES Act runs out at the end of the July.
“I would say we’ll get a bill and there resolve be plenty of resources there,” he said.