The United States's recovery from the coronavirus economic downturn is "highly uncertain" and many businesses will continue to struggle, a top Federal Reserve official said Wednesday.
Emergency programs rolled out by the government and Fed helped cushion the blow from the COVID-19 business shutdowns, but "the economy is still far from back to normal," central bank governor Michelle Bowman said.
"The future course and timing of the recovery is still highly uncertain, and its pace and intensity are likely to vary across areas of the country," Bowman said in a speech to Kansas bankers.
She noted that the initial wave of job losses were "heavily concentrated among the most financially vulnerable," including low-wage workers and minority groups.
As businesses were forced to close in the early days of the pandemic and travel was shut down, tens of millions of jobs were lost. Major companies such as the US-based airlines have announced thousands of additional job cuts and layoffs in October, unless government aid set to expire then is renewed.
Economists say unemployment, which was 10.2 percent in August, could spike even further when the Payroll Protection Program, which provided loans to businesses to retain workers, expires.
Bowman said that "with the progress of the recovery still tentative, I expect that many businesses will continue to fight for survival in the months ahead" and that "a full recovery in economic activity may well be slow and uneven."
The White House and Congress remain deadlocked on the design of a new emergency spending program that would support state and local governments and reinstate expanded unemployment benefits that have provided a lifeline for jobless workers.
Even so, Bowman remained optimistic, saying in her speech the country's economic fundamentals remain strong and "we have the solid foundation of the entrepreneurial spirit and resiliency of the American people."