US unemployment could hit 25%

People wait in line to get care packages with food donations from the Food Bank for New York City in Brooklyn, New York, New York, USA. EPA-EFE/Alba Vigaray

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Unemployment in the United States could peak at 25% as a result of the coronavirus pandemic, according to the chair of the Federal Reserve, amid warnings the June quarter economic figures will be “very, very bad”.

The bleak prediction came as Japan slid into its first recession in five years, with forecasts that worse was to come.

In a sober assessment of the economic impact of coronavirus in the US, the Fed chair, Jerome Powell, estimated GDP contraction in the June quarter could be “easily be in the twenties or thirties”, as fallout from the global outbreak worsened.

“So the data we’ll see for this quarter, which ends in June, will be very, very bad,” he said.

Asked about estimates of unemployment reaching 20-25%, Powell said: “I think there’re a range of perspectives. But those numbers sound about right for what the peak may be.”

As the bad news broke in the US, Japan marked two quarters of negative GDP growth, entering into a recession for the first time since 2015. The economy shrank in 0.9% to the end of March, off the back of a 1.9% drop at the end of 2019.

Some analysts predicted more grim news ahead, with the full impact of the pandemic still to be measured.

Read more via The Guardian

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