James Bullard, the St. Louis Federal Reserve President, says that he foresees the unemployment rate falling to 7 percent this year. Overall, Bullard alluded that he hoped that the economy would recover in the wake of the coronavirus-induced economic turmoil.
Currently, the unemployment rate stands at 11.1 percent. It originally peaked at 14.7 percent in April. Before the COVID-19 economic upheaval, unemployment was at a 50-year low at 3.5 percent. The current jobless rate is a post-World War II high.
Bullard commented, “I think we’re tracking very well right now. Seems to me like by the end of the year, you can get down certainly to single digits, probably even below 8 percent, maybe 7 percent, by the end of the year.”
Nonfarm payroll has gone up by 7.5 million over the past couple of months as workers returned to their jobs following the shutdown. But some economists are concerned that a recent surge in infections will slow the economic progress the country has gained in recent weeks.
However, Bullard thinks that new cases will make Americans more conscientious about the virus and start wearing their masks more. This, he anticipates, will reduce the threat to the virus overall, which may help boost the economy.
Bullard added, “If we get to that situation, we’ll have the disease under control. What I like about that scenario 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 good situation, get most of the production back to normal.”
Bullard also believes that Congress will add more funding to the Paycheck Protection Program in order to rescue businesses. The program was a loan designed to encourage businesses to keep workers on their payroll. The program has since expired.
“I would say we’ll get a bill, and there will be plenty of resources there,” Bullard said.