Dallas Federal Reserve Bank President Robert Kaplan said on Monday that while “a lot” of his business contacts had complained that the now-expired $600 weekly benefits to the unemployed made it harder for them to hire, the data does not show that they hurt the job market overall.
“We’ve looked at a number of studies, we’ve done our own work: we don’t see it as much in the data but I can tell you I’m hearing it from business people,” Kaplan told Bloomberg TV. “While it may have made it hard for certain individual businesses to hire, it has helped create jobs, because it has helped bolster consumer spending, so the net effect still has probably been positive for the economy for employment.”
Kaplan also said he did not agree with his colleague, Minneapolis Fed President Neel Kashkari, who at the weekend said he thought the U.S. economy should shut back down again for 4 to 6 weeks to suppress the spread of COVID-19.
Instead, Kaplan said, universal mask-wearing could substantially mute transmission of the virus without a widespread lockdown. “I think we are going to have to learn to live with this virus. We are going to have to learn to reengage in our daily activities, but still control the virus,” he said. “Widespread mask-wearing is essential to that.”
He also said would not want to see the Fed try to shore up its easy monetary policy by aiming to get inflation back up to, and even a bit above, its 2 percent goal.
The Fed has already said it would keep rates near zero for the next couple of years, he said. “I would far prefer, when we do give forward guidance in the future, that we tie it to our dual mandate, and particularly tie it to unemployment, along with making progress on inflation.”
By Ann Saphir