Thomson ReutersNeel Kashkari stated Sunday that millions are being held back by concerns about the contagious COVID-19 Delta variant.The Minneapolis Fed president said that this could slow down the recovery of the US labor market.Fed policymaker: The better the economy will be if Delta is under control sooner.Subscribe to our daily newsletter 10 Things Before The Opening Bell.According to Neel Kashkari (president of the Federal Reserve Bank of Minneapolis), as the Delta variant spreads, as many as 9,000,000 Americans hold off from returning work, Neel Kashkari said Sunday.The Fed official said that this reluctance could slow the recovery of the US labor market. John Dickerson, chief political analyst at CBS, heard the Fed official on "Face the Nation"Kashkari stated that "we believe they're out-of-work because they've been anxious about COVID because of childcare problems because of these enhanced unemployment benefit,"The Delta variant is the most prevalent source of new cases in the US. Only two states are at high risk from infection by it, Massachusetts and Vermont. According to the New York Times database, COVID-19 has seen an increase in cases, hospitalizations, and deaths of 148% over the past two weeks.Federal Reserve policymaker, said that he had hoped for a rebound in the job market with millions returning to work in the fall. He still believes that will happen.He said, "But if people become nervous about the Delta version, that could slow down some of that labor-market recovery and thus be a drag upon our economic recovery." "So, the earlier we get people vaccinated, and the sooner we get Delta under control the better our economy will be," he said.Kashkari is one the most dovish members the Fed's Federal Open Market Committee. This committee manages the nation’s money supply and sets monetary policy.The US economy's most important indicator of slack is the labor market. Wages rise when businesses are short of workers, which can lead to an inflationary spiral.The reopening US economy and vaccine distribution have reduced the number of jobless claims to around 400,000, a low level that was seen during the pandemic. People are now taking up positions. However, nearly 10 million people were still unemployed at the end of June.Inflation has risen over the last few months and raised fears that the Fed will have to control it by raising rates aggressively.Like most Fed officials Kashkari believes that the current high levels of inflation are temporary. They believe that it is caused by large price rises in a handful of industries, such as autos, travel and transport, which are returning from pandemic-related inactivity. Not the entire economy.Kashkari stated that if the COVID-19 pandemic hadn't occurred, the US economy could have continued adding jobs in 2020.He said that the last recovery took 10 year to get everyone back to work, possibly referring to the Great Recession. "We can't have another 10 year recovery."Read More: Morgan Stanley's top 10 picks in a group that has doubled the S&P 500's value over the past 3 years are these 10 stocks
