U.S. recovery shows signs of levelling off amid resurgence in COVID-19 cases: Fed official
A senior U.S. Federal Reserve official has warned that the U.S. economy is showing signs of "levelling off" amid a resurgence in COVID-19 cases across southern and western states.
"There are a couple of things that we are seeing and some of them are troubling and might suggest that the trajectory of this recovery is going to be a bit bumpier than it might otherwise," Raphael Bostic, president of the Federal Reserve Bank of Atlanta, said in an interview with the Financial Times published Tuesday.
"We're watching this very closely, trying to understand exactly what's happening," Bostic said, adding high-frequency data had shown a "levelling off" of economic activity both in terms of business openings and mobility.
Bostic said the Atlanta Fed, whose district covers some of the regions hardest hit by the current outbreaks, including the state of Florida, was "trying to figure out whether this levelling off is something that is a more sustained pattern, or just a pause."
Florida, which initially avoided the worst of the pandemic in its first few months, now has the third-highest number of COVID-19 cases in the United States at 206,447 as of Monday, according to local media.
Many U.S. states have either paused or partially reversed their staged reopening of the economy after reporting record increases in coronavirus infections and hospitalizations in recent weeks.
Fed Chairman Jerome Powell warned last week that the sooner-than-expected reopening of the U.S. economy has brought "new challenges" for the country.
"While this bounce back in economic activity is welcome, it also presents new challenges, notably the need to keep the virus in check," Powell said at a congressional hearing, adding the path forward for the economy remains "extraordinarily uncertain" and will depend in large part on the success in containing the virus.
Anthony Fauci, the U.S. government's top infectious-diseases expert, also warned on Monday that "the current state is really not good."
A series of circumstances associated with various states and cities trying to open up, in the sense of getting back to some form of normality, has led to a situation where the country now has record-breaking cases, Fauci said.
The number of COVID-19 cases in the United States reached nearly 2.95 million as of Tuesday morning with more than 130,000 deaths, according to a tally by Johns Hopkins University.