WASHINGTON (Reuters) – The economic downturn from the coronavirus outbreak in the United States will be deep and any recovery will depend on consumers feeling safe enough to start spending again, Richmond Federal Reserve Bank President Thomas Barkin said on Wednesday.
“How deep will this downturn be? How long will it last? How fast will we recover? The answer to the first question is now clear: it will be deep,” Barkin said in a post on the Richmond Fed’s website.
He said the success of any recovery would hinge on consumers being reassured by businesses, particularly in the service sector, that they will be safe.
“Businesses will have to find a way to convince consumers to shop, or eat out, to travel, or go to a concert or a game,” he said, suggesting restaurants could offer less server contact and less dense seating, while airlines could fly with the middle seat empty.
“Many of these changes could increase costs and prices, but they could also reassure the public enough to bring business back to life,” Barkin said.
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