(Reuters) - A vaccine to prevent the coronavirus may not be widely available until next summer, and households could struggle over the next several months without more government aid, Richmond Federal Reserve Bank President Thomas Barkin said on Monday.
While development of an effective vaccine could boost growth by making people more comfortable with in-person activities, such a vaccine may not be widely available "until this summer at best," Barkin said during an event organized by Greater Winston-Salem, Inc. "So the next few months could be challenging."
AstraZeneca (NASDAQ:AZN) said on Monday its COVID-19 vaccine could be as much as 90% effective, becoming the third drugmaker to announce positive vaccine developments in three weeks. The news comes as coronavirus cases are rising in much of the country.
The Fed official said that even though some state and local governments may hesitate to enact more shutdowns, many consumers are changing their behavior and cutting back on certain activities.
Low-income workers who became unemployed during the pandemic may struggle to find new jobs because many of the service sector businesses they might normally turn to for work, ranging from restaurants to retail stores, are still suffering from weak demand.
Prospects for another robust stimulus package are dimming as it looks like the U.S. government will remain divided next year, though it is still possible lawmakers will pass a more targeted bill, Barkin said. Savings workers accumulated until now may help backstop households that are struggling financially, he said.
"My outlook is a slow and steady recovery," he said. "We took the elevator down but we’re going to need to take the stairs back up."