St Louis Fed's Bullard: Room For "Substantial Decline" In Jobless Rate

A just-released presentation by St Louis Fed President Bullard today is largely focused on COVID and the labor market (CLICK HERE FOR PDF).

Recall his statement last month, "What I think will be surprising a little bit to markets is that the economy will continue to improve, possibly more rapidly than financial markets currently think, and yet the Fed will just keep with its current policy"

Key bit in that regard, from his speech today, is on unemployment, with room for a "substantial decline" in the jobless rate (Fed median from most recent projections in September is 7.6% end-2020, 5.5% end-2021, 4.6% end-2022). From the presentation:

• "A back-of-the-envelope calculation suggests that there is room for a substantial decline in the official unemployment rate in the months ahead."
• "If all those unemployed identifying as "on temporary layoff" are simply recalled and nothing else changes, the official unemployment rate would decline to 4.9%."
• "If the "on temporary layoff" category returns to a normal value (e.g., 1 million workers) and nothing else changes, the official unemployment rate would still decline to 5.5%" "