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.
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 DJIA, +0.19% up 0.2%.