Investor Alert

New York Markets Close in:

Sept. 25, 2020, 8:57 a.m. EDT

U.S. economy is out of recession but still vulnerable, Fed’s Barkin says

The economy is out of the hospital but not healthy, Richmond Fed President says

Watchlist Relevance

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    Dow Jones Industrial Average (DJIA)

or Cancel Already have a watchlist? Log In

By Greg Robb, MarketWatch

Richmond Fed President Thomas Barkin

The U.S. recession was severe but also short and is now over, said Richmond Fed President Tom Barkin on Thursday.

The U.S. went into a recession on March 15 when the economy went into a lockdown to try to stem the outbreak of the coronavirus. It ended in June or July, Barkin said during a talk with the Baltimore City Chamber of Commerce.

The U.S. economy sank at a record 31.7% annual rate in the second quarter. Economists expect sharp recovery in the third quarter.

A committee of economists led by the National Bureau of Economic Research decides the official timing of recessions and this is not known to be a swift process. A decision could come “like three years from now,” about when the pandemic-hobbled economy slipped in and out of recession, Barkin quipped.

St. Louis Fed President James Bullard said earlier Thursday the economy could fully recovery on some metrics by the end of this year.

Even if the recession is over, Barkin said he didn’t think the economy would recover fully until 2021 or after. l

The U.S. economy “has kind of been in the hospital and we’re out of the hospital now but we’re recovering at home,” Barkin said.

“We’re vulnerable” to another adverse development, he said.

“That could be a lot of things. I mean imagine for a second some big showdown with Iran or China or imagine a terrorist incident on U.S. soil. Something else that wings in from left field, that’s the thing I worry about the most.

“I do think the economy is getting healthier but we’re not healthy,” he said.

Stocks, which have been volatile this week and on Thursday, closed higher, with the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -2.92%   up 0.2%.

US : Dow Jones Global
-802.89 -2.92%
Volume: 292.19M
Oct. 28, 2020 1:48p

Greg Robb is a senior reporter for MarketWatch in Washington. Follow him on Twitter @grobb2000.

This Story has 0 Comments
Be the first to comment
More News In
Economy & Politics

Story Conversation

Commenting FAQs »
Link to MarketWatch's Slice.