Hopes for a double-digit economic upturn in the fall of this year have most likely been tamped down, the president of the Federal Reserve Bank of Dallas has remarked during a video conference.
The Federal Reserve Bank of Dallas comprises the nation’s Eleventh Federal Reserve District, which takes in all of Texas, southern New Mexico, and the northern half of Louisiana.
Because of the large presence of drilling in those areas, the district is popularly known as the Oil Patch.
Fred Kaplan, president of the Fed’s Dallas Bank, said the mid-summer COVID-19 resurgence has dampened earlier expectations for a more significant third and fourth quarter growth for this year.
“The issue is how fast are we going to grow out of this big decline we had in the second quarter,” remarked Kaplan, “and unfortunately with this resurgence in disease, it’s muting that rebound.”
That is not to say that the picture is entirely gloomy: while Kaplan is predicting a 4.5 to 5 percent decline in the national economy for the rest of this year, he also sees “above trend” growth for 2021.
Kaplan is additionally marginally upbeat when it comes to the unemployment picture.
Noting that the U.S. started out this year with an historically low 3.6 percent jobless rate that ballooned to around 14 percent in the wake of the virus outbreak, Kaplan thinks that rate by the end of this year will be down to 9 or 10 percent.
The unemployment rate, he added, could well drop to as low as 7 percent by the end of 2021.
The latest Federal Reserve statistics for El Paso show an employment rate that marginally improved in late spring, although the rate was still high at 13.5 percent.
Similarly, unemployment in southern New Mexico has spiked upward from around 4 percent earlier this year, to more than 11 percent as of early summer.
By Garry Boulard
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