Public Affairs

NY Fed President Calls This ‘A Different Kind of Recession’

New York State Showing Initial Signs Of A Turnaround

Keith Griffin

July 1, 2020

NY Fed CEO John C. Williams

John C. Williams, president and CEO of the New York Federal Reserve Bank, in remarks at the Institute of International Finance: Central Banking in the Age of COVID-19 Summit, said the COVID-19 pandemic has created a different kind of recession. In his virtual remarks, Williams observed the pandemic and the ensuing economic downturn have done disproportionate harm to communities of color.

In his talk, Williams said the economic effects of the coronavirus have caused great hardship and created enormous uncertainty. The root of this downturn—a global pandemic—means this is a completely different kind of recession compared to anything we've experienced in the past.

He explained, “One of the things that's been unique about this recession is the lightning speed of events. Traditional macroeconomic data sources—like the labor market report and GDP—are published with lags of weeks or months and don't typically allow one to see the changes within the month or quarter.”

He added Black and Hispanic families, as well as lower-wage workers, have suffered the most. Those who least can afford it have been hardest hit, making a strong and full economic recovery of paramount importance.

Williams does see a silver lining in the current clouds. He said in his prepared remarks, “As the recent surge in cases in some states demonstrates, much is still unknown about how the pandemic will play out in the months ahead. That said, there have been signs that we may be past the worst of the extreme economic distress, and early indications of a recovery have started to emerge.”

Among the positive indicators are sizable increases in consumer spending; increases in building permits, signaling a turnaround in the construction industry; and the unemployment rate has started to edge down. “Although this improvement is welcome, the economy is still far from healthy and a full recovery will likely take years to achieve,” he said.

“Even in New York, the hardest hit state, we have seen initial signs of a turnaround. Surveys of manufacturing and services firms rebounded significantly in June, following record lows in April and May, and revenues of small businesses in New York have gradually picked up as well,” Williams said.

Read his complete remarks.

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