As coronavirus cases soar around the U.S., signs of economic recovery appear to be leveling off in parts of the country, according to Raphael Bostic, president of the Federal Reserve Bank of Atlanta.

One of 12 federal reserve bank and districts, the Atlanta Federal Reserve covers some of the regions hit hardest by the current outbreak, including Florida. The Atlanta Fed also covers Alabama, Georgia, southern Louisiana, southern Mississippi and the eastern two-thirds of Tennessee. 

The economic rebound from states reopening businesses is in danger of stalling as a result of the recent spike in several large southern and western states, Bostic told Financial Times.

“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,” Bostic said. “And so we’re watching this very closely, trying to understand exactly what’s happening.”

The U.S. has reported 3,123,359 coronavirus cases and 134,364 deaths.

Bostic is the first Black person to serve as president of a regional Federal Reserve Bank. He previously worked in the Obama administration as a housing official. At a meeting of the Federal Open Market Committee, Bostic described “systemic racism” as a “yoke that drags on the economy.”

May and June jobs data showed that U.S. employers added back 7.5 million of the 22.2 million jobs lost since the onset of the coronavirus crisis, raising hopes of a labor market rebound. But those data were collected before a surge of infections in Florida, Texas, Arizona and California, resulting in local officials re-imposing restrictions lifted after the initial lockdowns, FT reported.

Despite Bostic’s assessment that the recovery is leveling off, White House Economic Adviser Larry Kudlow insisted Wednesday that the U.S. is in the middle of a “V-shaped recovery.” It would be a “big mistake” to shut down the country amid a surge in positive cases of COVID-19, he told Fox News.

Investment bank Jefferies said on Monday that after two months of improvement, its index of U.S. economic activity has “clearly flatlined”. “Regional data show particular weakness in virus-hit states, where V-shaped recoveries are morphing into Ws,” Jefferies economists Aneta Markowska and Thomas Simons wrote in a note.

“The loss of momentum is broad-based, spanning small business activity, discretionary footfall, restaurant bookings, traffic congestion and web traffic to state unemployment portals,” Jeffries said, citing data sources that update more often than official statistics.

Unemployment benefits will run out for millions of Americans at the end of July and lawmakers are on recess until the week of July 20.

Bostic, 54, said the Atlanta Fed is “trying to figure out whether this leveling off is something that is a more sustained pattern, or just a pause” He said his biggest concern to what extent business and job losses are permanent.

The $3 trillion in coronavirus aid to businesses and households approved earlier this year is running out or about to expire.

There’s reason to suggest the economic crisis is going to last longer than expected, Bostic said, “which means it’s only natural, given that possibility, to start thinking about what the next relief package should look like.”

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On Fox, Kudlow touted the “tremendous burst of jobs in May and June” and “tremendous record hiring rates … People are starting to quit their jobs again, which is extraordinary, in order to shop around for better jobs and wages,” he said.

Another shutdown would “do more harm than good,” Kudlow added, desperately pinning his hopes on a V-shaped recovery. “It would harm everyone. Not just businesses — the V-shaped recovery would give way … That solution would be worse than the disease.”

Small businesses are most at risk, Bostic 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 the permanent column and that will be extremely painful.”