Tom Barkin, president of the Federal Reserve Bank of Richmond, is optimistic overall about the nation’s economic recovery. The housing market is strong. Job creation has resumed. Disposable incomes are up. And families are saving more and paying down their credit cards.ย
But he worries about “scarring” — a term that economists use to describe longer-term negative impacts that can hinder economic recovery. “Severe downturns can leave scars that, while not always permanent, take a long time to heal,” he said in a March 21st speech at the virtual Credit Suisse Asian Investment Conference.
COVID-19 lockdowns hit hit primary caregivers particularly hard by closing schools and child care facilities, putting pressure on at least one parent to stay home. Labor force participation for parents, said Barkin, is about 6 percentage points below where it was prior to the pandemic. “If parents who left the workforce don’t return, that would have long-term negative implications for our growth potential.” (more…)

















