Minneapolis Fed president: ‘The worst is yet to come on the job front’

The president of the Federal Reserve Bank of Minneapolis said Sunday that the “worst is yet to come” after a record of 20 million people lost their jobs amid furloughs and layoffs sparked by the coronavirus pandemic in April. 

“I mean the worst is yet to come on the job front, unfortunately,” Neel Kashkari said on ABC’s “This Week.”

“We may be in an environment of gradual relaxing and then having to clamp back down again around the country as the virus continues to spread,” he added. “To solve the economy, we must solve the virus. Let’s never lose sight of that fact.”

Kashkari also contradicted White House economic adviser Larry Kudlow’s prediction for a financially strong half of 2020 and full 2021 when ABC’s George Stephanopoulos asked if that was realistic.

“You know, I wish it were,” he responded. “What I’ve learned in the last few months, unfortunately, this is more likely to be a slow, more gradual recovery.”

President of Minneapolis Federal Reserve Neel Kashkari says economic recovery in the U.S. “is more likely to be a slow, more gradual recovery.”

“There’s evidence that when countries relax their economic controls, the virus tends to flare back up.” https://t.co/qytNHeSx9S pic.twitter.com/egYF6wQm6u

— This Week (@ThisWeekABC) May 10, 2020

The Minneapolis Fed president said a “robust economy” would require a breakthrough in vaccines, testing and therapies. 

“I don’t know when we’re going to have that confidence,” he said, adding, “and ultimately, the American people are going to decide how long the shutdown is.”

The Department of Labor reported last week that the unemployment rate had reached 14.7 percent, which is the highest since the U.S. began tracking in 1948. More than 33 million people have applied for unemployment claims since mid-March.  

Speaking earlier Sunday on “This Week,” Kudlow acknowledged that “very difficult” unemployment numbers could likely be reported in May. But he added that there is a “glimmer of hope” within the unemployment data, with 80 percent of the claims involving those who were furloughed or going through temporary layoffs.