Jump to content
BANGKOK
webfact

As millions lose jobs, Fed policymakers say recession is here

Recommended Posts

As millions lose jobs, Fed policymakers say recession is here

By Ann Saphir

 

2020-04-03T013825Z_3_LYNXMPEG3123W_RTROPTP_4_USA-FED-KASHKARI.JPG

FILE PHOTO: Minneapolis Federal Reserve Bank President Neel Kashkari poses during an interview with Reuters in his office at the bank's headquarters in Minneapolis, Minnesota, U.S., January 10, 2020. REUTERS/ Ann Saphir

 

(Reuters) - The U.S. recession is here. How long it will last will depend on the course of a viral pandemic that could still kill hundreds of thousands of Americans, and has most of the country under lockdowns aimed at slowing the infection's spread.

 

But how quickly the world's biggest economy will recover will depend on how much aid the government gives it, and how effectively it can be used to stem what are already millions of job losses, Fed officials said on Thursday.

 

"One thing we know from 2008, when you had millions and millions and millions of Americans losing their jobs, it took more than a decade to put the labor market back together," Minneapolis Federal Reserve Bank President Neel Kashkari said in a webcast townhall event. "I'm really pleased that a lot of the action by the federal government and the state governments has been focused on trying to keep workers in their jobs."

 

Kashkari was referring to the brand-new $350 billion Paycheck Protection Program, due to be rolled out on Friday to provide small businesses with grants to keep their workers on the payroll.

 

The program is a key part of the $2.2 trillion coronavirus rescue package passed by Congress last week.

 

In the past two weeks 10 million Americans have newly filed for unemployment insurance, a figure Kashkari called "shocking and disturbing." His wife, who worked at a corporate travel management company, is among the legions of newly jobless Americans, he said.

 

If employees remain attached to their former jobs, he said, the recovery may be faster because companies will be able to restart much more quickly.

 

If businesses cannot reopen and cannot keep their employees on the payroll, "you would see waves of thousands of business going through bankruptcies (and) that is what would lead to a long, much more shallow recovery."

 

Speaking earlier in the day to CNBC, Dallas Fed President Robert Kaplan agreed the economy is already in a "severe contraction" and forecast that unemployment could rise to the low or mid teens.

 

A 15% unemployment rate would mean 24 million Americans out of work. The rate was 3.5% in February, and peaked at 10% during the Great Recession.

 

"We know that because of these shutdowns, the service sector is going to come out more challenged, and the consumer is going to come out more challenged," Kaplan said, referring to mandates in most states that force non-essential businesses to close and require people to stay home as much as possible.

 

While he expects the unemployment rate to drop to around 8% by year's end, Kaplan said, "it will take us a while to work that off."

 

Rescue efforts for the economy, including the $2.2 trillion package passed last week, are essential, he said. But "there's going to have to be more fiscal action," Kaplan said.

 

(Reporting by Ann Saphir; Editing by Chizu Nomiyama and Alistair Bell)

 

reuters_logo.jpg

-- © Copyright Reuters 2020-04-03

Share this post


Link to post
Share on other sites
1 hour ago, Chomper Higgot said:

It’s written right there under the photo:

 

’File Photo’.

Ah my bad.

Share this post


Link to post
Share on other sites

What type of cigars do you think he smokes? 

Share this post


Link to post
Share on other sites

Sara as after the world war, much to rebuild and reorganize ...

Share this post


Link to post
Share on other sites
43 minutes ago, nobodysfriend said:

 

The ( money ) printers will run hot ... but Recession will come anyway .

The $ will go where ...?

What is going on now, is not really a stimulus program designed to keep the country out of recession. . It's basically a life raft. But there will be a severe recession and possibly worse if a massive stimulus isn't applied once the coronavirus situation is mild enough to allow people to return to work.

"Well, what happens is that just as the economy is ready to recover, mass layoffs of school teachers, mass cutoff of unemployment benefits undermine the nation's recovery. This could end up being in a way, a little bit like what happened in 2008-2009 when we had a pretty effective response to the crisis, but then went to fiscal austerity, which meant that the recovery was very, very slow.

Even though this is a very different kind of crisis, we could have the same kind of story. "

 

https://www.businessinsider.com/paul-krugman-warns-of-fiscal-time-bomb-if-relief-insufficient-2020-4

 

  • Like 1
  • Haha 1

Share this post


Link to post
Share on other sites
4 hours ago, marko kok prong said:

Chap seems to be looking rather cheerful,no doubt very well paid and no need to worry.

That's the way the cookie crumbles.

Share this post


Link to post
Share on other sites
2 hours ago, nobodysfriend said:

 

The ( money ) printers will run hot ... but Recession will come anyway .

The $ will go where ...?

down the black rabbit hole with the other 24 trillion owed. The consensus of trust which keeps investors buying American debt could soon be sorely tested. A falling Dollar would be a godsend to SE Asia and the USA but not welcomed by China or Japan who hold a large chunk of America's debt. Strange times are coming.

  • Like 2

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

×
×
  • Create New...