Recession is here: Fed officials say as unemployment claims spike in US

03.04.2020 - Kulakov Vladimir
Recession is here: Fed officials say as unemployment claims spike in US

Fed officials said on Thursday that “recession is here” and the economy’s recovery relies on U.S. government aid and its effectiveness in combating the impact of millions of lost jobs.

The Fed added that the duration of the recession was dependent on the course of the pandemic, noting that it could still kill a huge number of Americans amid imposed lockdowns aimed at containing the outbreak.

Echoing the 2008 economic recession, Minneapolis Federal Reserve Bank President Neel Kashkari said that millions of Americans losing their jobs meant a decade of putting back the labor market. He added that the federal and state government’s actions aimed at keeping workers in their jobs were pleasing. 

The program that Kashkari referred to was the $350 billion Paycheck Protection Program to be released on Friday. It aims to provide small businesses with grants so they can pay their workers despite the lockdown. The economic stimulus is a major part of the $2.2 trillion coronavirus emergency package passed by Congress.

In the last two weeks, 10 million Americans have filed for unemployment insurance. Kashkari said that economic recovery may be quicker if employees still had their jobs to allow companies to reopen much faster.

He added that a spike of business bankruptcies meant a long and more shallow economic recovery.

Dallas Fed President Robert Kaplan also said that the economy is already in a “severe contraction.” 

A 15% unemployment rate equals 24 million jobless Americans. In February, unemployment was at 3.5% and peaked at 10% during the Great Recession.

Rescue efforts to support the economy, such as the $2.2 trillion emergency package are essential, but more fiscal action is also necessary, Kaplan said.

Risk disclaimer "Market Solutions Ltd – Suite 305 Griffith Corporate Centre P.O. Box 1510 Beachmont, Kingstown, St Vincent and the Grenadines is a financial services institution outside the European Union Area, which is subject to the supervision of the IFMRRC Certificate 0395 AA V0128 Trading in Forex/ CFDs and Other Derivatives is highly speculative and carries a high level of risk. It is possible to lose all your capital. 70% of trading deals can be unprofitable. These products may not be suitable for everyone and you should ensure that you understand the risks involved. Seek independent advice if necessary. Speculate only with funds that you can afford to lose. This Website may contain information in particular regarding financial services and products that could be regarded b a E.U. supervisory authority as an offer of financial services targeted in Europe. ESMA intervention measures do not apply to customers of Market solutions Ltd and it is your responsibility to choose a company which is most suitable for your trading needs. By clicking continue you confirm that you have read, understood and agree to the risk disclosures, terms of service, cash policies, privacy policies and this notice and that you are visiting this website on your own initiative, without any encouragement whatsoever from Umarkets.com or Market Solutions limited." Cookies notification: “We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we assume that you are happy with it. Continue
×

Help with deposit?