The U.S. Labor Department's monthly employment report to be released on Friday is likely to understate the number of jobs lost during the coronavirus pandemic because many people are not actively looking for new work, Minneapolis Federal Reserve Bank President Neel Kashkari said Thursday.

Kashkari, asked what the jobs report might show during an interview on NBC's Today Show, said the reported unemployment rate could be as high as 17%, but the true unemployment rate may be as high as 23%. "That bad report tomorrow is actually going to understate how bad the damage has been," he said.

Despite the stark forecast, Kashkari said he was hopeful policymakers could avoid a depression scenario for the U.S. economy after learning lessons from the Great Depression of the 1930s.

"The Federal Reserve is acting aggressively, we will continue to act aggressively," he said.

Still, Kashkari said the economic rebound was likely to be "gradual" until there was the development of a vaccine or therapy to treat the virus.

It could be a while before consumers feel comfortable sitting in a full movie theater or a crowded restaurant, he said, and many restaurants may struggle to make ends meet if they are only serving half as many customers. "Unfortunately, the recovery looks like it is going to be slow," he said.

Authorities also need to be careful with plans to reopen the economy so they can avoid a flare up of new cases, Kashkari said.

"The virus is still spreading throughout much of the country," he said. "We have to continue to be very measured and not reopen too quickly because we may pay the price for that."