Atlanta Fed president Bostic warns of a 'bumpier' road ahead, and says the US economy's recovery is 'leveling off' as COVID-19 cases surge

"There are a couple of things that we are seeing and some of them are troubling and might suggest that the trajectory of this recovery is going to be a bit bumpier than it might otherwise," he told the Financial Times.
US added jobs for a second straight month in June, but this was before a resurgence of COVID-19 cases hit several US states.
Bostic said his "biggest concern in this whole period ... is to what extent are business losses permanent, are job losses permanent?"
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As a second wave of COVID-19 cases continue to rip across the US, the Fed's Raphael Bostic thinks this is making the path to economic recovery even tougher and the economy is "leveling off."

"There are a couple of things that we are seeing and some of them are troubling and might suggest that the trajectory of this recovery is going to be a bit bumpier than it might otherwise," the Federal Reserve Bank's Atlanta Chief told the Financial Times .

"So we're watching this very closely, trying to understand exactly what's happening."

Bostic's precautionary note comes despite improving employment figures in the US.

American businesses added 4.8 million jobs during June, according to the Bureau of Labor Statistics .

That exceeded the 3 million new jobs expected by economists surveyed by Bloomberg and represented the second straight month of job additions during the coronavirus induced recession.

Read More: JPMORGAN: The coronavirus crisis has decimated one of the safest defenses against stock-market crashes. Here are 4 ways to pivot your portfolio now. Ahead of the May jobs report, economists were predicting job losses of 7.5 million instead of an addition of 2.5 million new jobs that emerged in that month's job report. But the data used for the June jobs reported was likely compiled before an alarming number of COVID-19 cases hit states such as Texas, California, Arizona, to name a few. The US recorded over 55,000 cases in a single day last Thursday. Bostic he was "trying to figure out whether this leveling off is something that is a more sustained pattern, or just a pause." Read More: GOLDMAN SACHS: Buy these 13 stocks that are poised to crush the market within the next 2 weeks as earnings season gets underway Bostic's comments reinforce the view that a V-shaped recovery may be a fantasy for the US economy and the road to economic recovery will be much tougher than initially anticipated. Bostic said his "biggest concern in this whole period ... is to what extent are business losses permanent, are job losses permanent?" He said he believes fiscal support by the government and unemployment benefits will stay in place for longer. "When the relief was passed initially, there was a thought about how long this was going to last, and as more information has come in, there's reason to suggest this is going to last longer than that," Bostic said. He added: "Given that possibility, to start thinking about what the next relief package should look like." He identified smaller businesses as the most vulnerable to job losses. He said: "The longer this goes without them getting relief, the more likely that they're not going to be able to survive. And so all the jobs associated with that will move from the temporary column into permanent column and that will be extremely painful." He believes monetary policy will be ineffective on its own in closing economic disparities. "For me I think it's really important that we diagnose the problem and recognise that there are some barriers." He added: "We need to make sure that we're applying policy prescriptions that speak to those barriers and monetary policy, I think, can help to some regard on the trajectories, but [for] more fundamental equality of access I think it's going to take more than just that." NOW WATCH: Pathologists debunk 13 coronavirus myths See Also: Giving people free money has kept 12 million people out of poverty and given the economy a crucial boost US companies added 2.37 million jobs in June, fewer than economists expected, ADP says US consumer confidence jumps most since 2011 as the economy reopens