The damage of the coronavirus pandemic on the US economy could be ‘lasting’, warned the president of the Central Bank on Wednesday, noting that emergency aid plans are essential to avoid a deep recession.
“Additional budget support could be costly, but it is worth it if it avoids long-term economic damage and allows us to have a stronger recovery,” Jerome Powell said in a speech.
“The current slowdown is unique in that it is due to the virus and the measures taken to limit its fallout,” he said.
To date, Congress has provided some $ 2.9 trillion in budget support to households, businesses, health care providers, and states and local communities, “or about 14 percent of gross domestic product,” he said. he called back.
Stressing that the ‘recovery may take some time before accelerating’, he believes that additional aid will probably be needed to combat the impact of the coronavirus.
Jerome Powell noted that ‘the scale and speed of this recession is unprecedented’ in modern history, ‘much worse than any recession since the Second World War’.
20 million unemployed
The job gains accumulated over the past decade have already been wiped out, he said in particular.
In less than two months, more than 20 million people have lost their jobs.
He reported a Fed survey to be released on Thursday showing that among those who were employed in February, just before the outbreak of the epidemic, ‘nearly 40% of those in households earning less than 40,000 dollars a year lost their jobs in March ‘.
The lives of all these people have changed dramatically and there is great uncertainty about their future, he said.
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