Kashkari says second virus wave will boost unemployment again

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A second wave of coronavirus cases in the fall will probably push the U.S. unemployment rate higher again, Federal Reserve Bank of Minneapolis President Neel Kashkari said on Twitter.

“Unfortunately, my base case scenario is that we will see a second wave of the virus across the U.S., probably this fall. We’re already seeing growth in many states,” Kashkari tweeted Friday while answering questions on the social-media platform. “A vaccine is a long way off.”

“If there is a second wave, I would expect the unemployment rate to climb again. I think the real number today is around 20%,” he added in a follow-up tweet.

Federal Reserve Bank of Minneapolis President Neel Kashkari
Federal Reserve Bank of Minneapolis President Neel Kashkari

The official unemployment rate fell to 13.3% in May after the fallout from the pandemic sent it surging to 14.7% in April. According to projections published on June 10, Fed officials saw unemployment ending the year somewhere between 7% and 14%.

Bloomberg News