Fed's Bullard: July slowdown shows will be ups and downs and recovery

Author: Greg Michalowski | Category: Central Banks

Fed's Bullard changing his tune a bit

Fed's Bullard is participating in a virtual discussion on the economy. He says:
  • virus prove to be more persistent than expected
  • can't just declare virus victory and go back to normal
  • July slowdown shows will be ups and downs and recovery
  • looks like April will be the low point of the recession
  • he still have to take mitigating action to keep the disease under control even if fatalities, down
  • virus is proving to be less deadly than initially feared but also turned out to be more persistent
  • May and June surprised to the upside, and he expects a slowdown in the recovery in July to be consistent with expectations. We shouldn't expect a smooth transition going forward
  • The mortality rate for Covid has surpassed that of accidental injury to be, the 3rd largest killer in 2020
Recall Bullard was speaking much more positively a month or so ago when he said that the unemployment rate could get below 8%. He seems to be hedging his bets a bit today

The US employment statistics will be released on Friday. The change in nonfarm payroll is expected to show an increase of 1.5 million. That is below the 4.8 million last month the unemployment rate is expected to dipped to 10.5% from 11.1%. Goldman Sachs today said that they were lowering their expectations for nonfarm payroll to +1.0 million. They said:

"Our trackers suggest that current household employment has fallen by roughly one million since the June survey week, and that as of July 15 the unemployment rate had risen back up to 11.5% after falling to 10.5% in late June (vs. 11.1% in the June survey)."

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