Boston Fed President Eric Rosengren said a recent slowdown in U.S. economic activity is likely to persist because of difficulties states have encountered in suppressing the coronavirus pandemic.
“Limited or inconsistent efforts by states to control the virus based on public health guidance are not only placing citizens at unnecessary risk of severe illness and possible death but are also likely to prolong the economic downturn,” Mr. Rosengren said Wednesday in remarks prepared for delivery online to the South Shore Chamber of Commerce in Massachusetts.
Mr. Rosengren said he expected the unemployment rate, which stood slightly above 10% in July, would be slow to decline given worsening public-health situations in more states that were quick to lift lockdown orders in May. Easing restrictions prematurely “hurt both the economy and public health down the road,” he said.
By contrast, Mr. Rosengren pointed to data on infection and death rates from Europe, which imposed tighter limits on commercial activity in the spring and has seen a stronger rebound in economic activity in recent weeks due to much lower infection rates.
Visits by Europeans to retail and recreation locations have now created a more robust recovery compared with the U.S., leaving Europe close to pre-pandemic levels, he said.