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‘It’s devastating’ — Jobs number will be bad, but the reality is actually much worse

Warning from the Minneapolis Federal Reserve Bank President Neel Kashkari

That’s the cautious view Minneapolis Federal Reserve Bank President Neel Kashkari shared on NBC’s Today Show in an interview ahead of Friday’s monthly employment report, which he says won’t give the clearest picture of job losses amid the coronavirus pandemic.

“That bad report tomorrow is actually going to understate how bad the damage has been,” Kashkari explained, adding that the reported unemployment rate could be as high as 17% — a brutal number, no doubt — but he says the true number may be as high as 24%. “It’s devastating.”

Still, he remains optimistic the U.S. can avoid a Great Depression scenario. “The Federal Reserve is acting aggressively, we will continue to act aggressively,” he said. The central bank’s balance sheet has ballooned to a record $6.7 trillion as it rolls out an unprecedented amount of stimulus to help limit the harm of business closures and seized up economic activity on financial markets. Even then, however, Kashkari said the economic rebound will be “gradual” until a vaccine or a therapy allows the country to get fully back to work. And that could take a while. “When are we all going to feel safe to go sit in a crowded movie theater with a couple hundred other strangers around us?” he asked. “Unfortunately, the recovery looks like it is going to be slow.”

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