Experts warned Coronavirus Delta Variant Could Block the US Economic Recovery

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The Minneapolis Federal Reserve President Neel Kashkari has warned the Delta variant can block the economy’s comeback. However, the coronavirus Delta variant has already led some officials to reinstate mask mandates. Kashkari said in a press interview that a more transmissible delta variant is breeding caution among Americans. It has contributed to hesitancy when it comes to going back to work. He said, “I was very optimistic the fall would be a very strong labor market with many of those Americans coming back to work. That’s still my base-case scenario, but if people are nervous about the delta variant, that could slow some of that labor market recovery and therefore be a drag on our economic recovery. So, the sooner we can get people vaccinated, the sooner we can get delta under control, the better off our economy’s going to be”.

Kashkari pointed out that there are more indirect factors behind people not returning to work. These include having issues with child care and enhanced unemployment benefits. Republicans have also warned that those benefits have led to a lack of motivation to return to work. The benefits pay more than the jobs people had, in some cases. They have urged the Biden administration to end the enhanced benefits to provide an extra $300 per week. However, the enhanced benefits will expire on 6^th September. President Biden warned in May that people who turn down job offers could lose their benefits. 26 States have opted out of the enhanced benefits and require people collecting unemployment to look for work. The National Economic Council Director Brian Deese also delivered his words in a press interview.

Deese said, “Jobs are plentiful and wages are going up while almost 70% of American adults have received at least one vaccine dose. We have to stay vigilant and we have to stay focused. But our economy and its recovery are strong. There is a durable momentum in the economy. We just have to keep that going”. Kashkari also addressed recent inflation and said, “It was greater than I thought. I still believe it is temporary because it isn’t broad inflation across the entire economy. We’re paying very close attention”. He also said that supply chain problems have impacted various industries over an inflation concern. But he was optimistic that these problems will get worked out. He pointed out a reduction in lumber prices after they had spiked and a temporary toilet paper shortage earlier in the pandemic.