Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

Federal Reserve Bank of Boston President Eric Rosengren. seen on Nov. 25, 2019, says U.S. consumer spending is likely to remain low.

Steven Senne/The Associated Press

The U.S. economic recovery will be gradual and slow until the coronavirus is under control, and Americans will have to learn to “live with” the virus for the next several months, three Federal Reserve policy-makers said on Wednesday.

Consumer spending will probably remain weak relative to the past as people avoid activities that require high levels of social interaction for health reasons, Boston Fed President Eric Rosengren said during an online event organized by the South Shore Chamber of Commerce in Massachusetts.

“The forecast for the U.S. economy this fall is quite uncertain, but my view is that the recent slowdown in economic activity that we have seen in high-frequency data is likely to continue,” Rosengren said.

Story continues below advertisement

San Francisco Fed president Mary Daly also shared a tempered forecast during a webcast discussion with the Economic Club of Las Vegas. Daly said the economic rebound will be slow and gradual, depending on the virus, and that she does not expect a V-shaped recovery.

With a vaccine unlikely to be ready in the immediate future, consumers and businesses need a plan to manage the risks of the virus throughout the fall and winter, Rosengren said.

Dallas Fed President Robert Kaplan voiced similar concerns, saying in a webcast event with the Lubbock Chamber of Commerce in Texas that Americans need to learn to “live with” the virus, using safety measures such as masks so the economy can remain open.

Rosengren said the United States had done a poor job of containing the virus when compared to parts of Europe, which lowered infection rates and deaths at a faster clip. He said those blunders were affecting the recovery, and pointed to states that saw only a short-lived increase in economic activity after lifting restrictions too quickly. In contrast, the states that enacted longer shutdowns earlier in the crisis were now benefiting from better health outcomes and more robust spending.

“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,” Rosengren said.

Kaplan said he expects the U.S. unemployment rate to remain elevated at 9% at the end of the year, but noted it could be lower if businesses and consumers take steps to control the virus. The unemployment rate in July was 10.2%.

“If we don’t follow that, while people may feel freer, the economy will grow slower,” Kaplan said.

Story continues below advertisement

Referring to the Fed’s Main Street Lending Program, which is meant to carry small and medium-sized businesses through the crisis, Rosengren said that low early use of the program was not a sign of failure and that more businesses may turn to the facility in the fall if the economy worsens.

Asked about the rise in U.S. government debt, Rosengren said he supports strong fiscal stimulus but cautioned it must be paired with efforts to contain the virus.

“If you want to actually make sure that the debt doesn’t explode, you have to make sure that we get the pandemic under control,” Rosengren said.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Coronavirus information
Coronavirus information
The Zero Canada Project provides resources to help you manage your health, your finances and your family life as Canada reopens.
Visit the hub
Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies