Unemployment in US could hit 25 per cent, says Federal Reserve Chairman

Updated: May 19, 2020, 08:46 IST | Agencies | Washington

His statement came days after a top economic adviser to President Donald Trump favoured giving tax incentives to American firms to move their manufacturing units from China to the US

People wait to receive a food bank donation in New York. Pic/AFP
People wait to receive a food bank donation in New York. Pic/AFP

The US economy, the world's largest, which has been thrown into a recession due to the pandemic, will rebound but the recovery could stretch through the end of next year, Federal Reserve Chairman Jerome Powell has said.

He, however, added that more people could lose jobs in May and June, and unemployment in the US could peak at 25 per cent, reported the Guardian. "So the data we'll see for this quarter, which ends in June, will be very, very bad... I think there're a range of perspectives," Powell said.

His statement came days after a top economic adviser to President Donald Trump favoured giving tax incentives to American firms to move their manufacturing units from China to the US. Powell said the good news is that the 20 million people who have been laid off report themselves as having been laid off temporarily. They are considered temporarily unemployed. And that is because they expect to go back to their old job.

Japan plunges into recession

Japan's economic growth plunged into recession in the first quarter as the pandemic squelched production, exports and spending, and fears are growing that worse times may lie ahead. The Cabinet Office reported on Monday a 3.4 per cent drop in the annual pace of seasonally adjusted real gross domestic product for the January-March period.

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