While the US economy may avoid a second widespread shutdown, the labor market and other aspects of the economy may not fully recover until there is a vaccine or other treatment that helps Americans feel safe spending and engaging in more activity, Richmond Federal Reserve President Tom Barkin said on Tuesday.

Many small businesses are reducing staff to adjust to lower demand, and the level of people filing for jobless claims for the first time each week remains elevated six months after the shutdown, Barkin said during a webcast conversation organized by the Rotary Club of Greenville.

"If this rate of initial claims continues, you have to imagine the recent improvements in the labor market are going to slow," Barkin said.