St. Louis Fed Economist Cautions Against Quick Economic Rebound
The economic recession sparked by the coronavirus pandemic is the deepest and shortest on record.
Chuck Gascon, a regional economist with the Federal Reserve Bank of St. Louis, said Wednesday during a virtual presentation that it could be a strong year for economic growth in the St. Louis region. But he worries that if public policy officials focus too much on bringing back as many jobs as quickly as possible, that could hurt the economy in the long run.
“If we bounce back really quickly but then we return to a slow growth trend, we’ll just be further behind than when we started. So we really have to balance these two things out as we move forward,” he said.
Gascon said one indication of a healthy economy is population growth — something the region isn’t expected to generate in the near future.
But he said the region could create more economic growth if it invests time and money in helping more existing residents get jobs, higher wages and increased property values.
“That’s a sign that the people here are doing better,” he said. “And that can set the foundation for future population growth in the region, as it's viewed as a place where there’s economic opportunities that do exist.”
Gascon said the economy has already recovered a bit from the pandemic; the regional unemployment rate has gone down. But there are still 72,000 fewer jobs today than before the pandemic. He said that’s because many people have stopped looking for jobs.
He said many of those people will likely return to work as soon as they feel it’s safe and the economy reopens, but he worries about the barriers facing those who lost their jobs in industries that were already declining.
“Those jobs just aren’t coming back,” Gascon said. “Then it’s about engaging and finding out what non-work resources they may need more than pointing them to a job or a training program.”
In order to get the economy on track to sustainable growth, he said public policy officials need to tackle the barriers keeping existing residents from working. Those are things like access to child care and reliable transportation.
“It’s not like we’re going to have a lot of people coming in from the outside to take jobs. We’re going to have to find ways to get people who are disconnected from the labor force to join in the labor force to help grow the economy,” he said.
Gascon said many businesses he’s spoken with are targeting early July to begin easing back into how they did business before the pandemic.
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