The coronavirus crises has sent the economy backword around the globe. The auto and restaurant industry have been major dip. So have manufacturing, fitness centres, air travel, and cruise lines. The stock market has seen enormous losses with daily wild swings.
Almost more than a decade one question which is in everyone’s mind is are we in a recession yet…
“The reality is that even without the data, this is the one time where we can look around and say, well, first of all, everybody is at home,” said Betsey Stevenson, an economist at the University of Michigan and former Obama administration official. “We won’t know for a long time what the full magnitudes of the decline are.”
Jerome Powell, the Federal Reserve Chairman said on Thursday that the US economy is already under recession because the actions taken to stop the spread of corona virus pandemic but it will be contained before economy can recover. However, he expected that economy could be in better state in the second half of the year.
“It’s very hard to say precisely when that will be,” he said. “The virus is going to dictate the timetable here.”
“We may well be in a recession,” the Fed chief said on NBC’s “Today.” But “there’s nothing fundamentally wrong with our economy. People are being asked to step back from economic activity … so in principle, if we get the virus spread under control fairly quickly then economic activity can resume.”
We are seeing rise in unemployment rate, according to labor department current unemployment claims have reached to 3.3m. The Senate has issue $2 trillion stimulus. The Fed has reduced the injected loans, interest rates, and have taken other steps to help the financial system.
“When it comes to this lending, we’re not going to run out of ammunition,” he said. “That’s not going to happen.” On asking him about his message to American people, Powell said: “The Federal Reserve is working hard to support you now, and our policies will be very important when the recovery does come.”