As millions lose jobs, Fed policymakers say recession is here

[webfact]

As millions lose jobs, Fed policymakers say recession is here

By Ann Saphir

 

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)

 

-- © Copyright Reuters 2020-04-03

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[marko kok prong]

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

[Chomper Higgot]

3 minutes ago, marko kok prong said:

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

It’s written right there under the photo:

 

’File Photo’.

[marko kok prong]

1 hour ago, Chomper Higgot said:

It’s written right there under the photo:

 

’File Photo’.

Ah my bad.

[Colabamumbai]

What type of cigars do you think he smokes? 

[Pedrogaz]

1 hour ago, marko kok prong said:

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

Well his bank account has just been filled to bursting by the taxpayers' children and great grandchildren I guess.

[bristolboy]

18 minutes ago, Pedrogaz said:

Well his bank account has just been filled to bursting by the taxpayers' children and great grandchildren I guess.

He's a member of the federal reserve not a captain of industry. Not even a lieutenant.

Edited April 3, 2020 by bristolboy

[nobodysfriend]

6 hours ago, webfact said:

Kashkari was referring to the brand-new $350 billion Paycheck Protection Program

 

6 hours ago, webfact said:

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

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

The $ will go where ...?

Edited April 3, 2020 by nobodysfriend

[30la]

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

[bristolboy]

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

 

[Mick501]

Shudder to think how many times the economic damage will be magnified  with economic mismanagement of Democrats and the like.   Imagine if they were locked in to some ridiculous climate policy at the same time!

[albertik]

4 minutes ago, Mick501 said:

Shudder to think how many times the economic damage will be magnified  with economic mismanagement of Democrats and the like.   Imagine if they were locked in to some ridiculous climate policy at the same time!

More good news... Pelosi is gearing up a new investigation against Trump.  You go girlfriend, don't let the current crisis stand in your way.

[soalbundy]

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.

[soalbundy]

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.

[wwest5829]

57 minutes ago, Mick501 said:

Shudder to think how many times the economic damage will be magnified  with economic mismanagement of Democrats and the like.   Imagine if they were locked in to some ridiculous climate policy at the same time!

Currently in the hands of the Republicans ... how’s it goin ...

[metisdead]

An off topic post has been removed. 

[bristolboy]

2 hours ago, Mick501 said:

Shudder to think how many times the economic damage will be magnified  with economic mismanagement of Democrats and the like.   Imagine if they were locked in to some ridiculous climate policy at the same time!

Imagine what would happen if the Republicans made a huge tax cut for corporations and justified it by claiming that it would encourage them to bring back cash from overseas and  use it to invest in America? But instead they used most of the cash to engage in stock buybacks? Oh wait a minute. That's what actually happened.

[samran]

3 hours ago, Mick501 said:

Shudder to think how many times the economic damage will be magnified  with economic mismanagement of Democrats and the like.   Imagine if they were locked in to some ridiculous climate policy at the same time!

Based on your post, either you think that:

 

a) the Democrats are in control of the government

b) the Democrats will win government in November

 

Anyway, don't worry. You've got the republicans in charge who are going to resort to their go-to "trickle down' economics of tax cuts for the wealthy which will be the panacea for everything. On top of that, a large group of unemployed will mean that they can continue to pay less than a living wage - well because, they can...

 

And when it all goes wrong, you can still blame Obama. Or Hillary....

[Cryingdick]

4 hours ago, samran said:

Based on your post, either you think that:

 

a) the Democrats are in control of the government

b) the Democrats will win government in November

 

Anyway, don't worry. You've got the republicans in charge who are going to resort to their go-to "trickle down' economics of tax cuts for the wealthy which will be the panacea for everything. On top of that, a large group of unemployed will mean that they can continue to pay less than a living wage - well because, they can...

 

And when it all goes wrong, you can still blame Obama. Or Hillary....

 

The trickle down as opposed to the "bubble up"? That phrase Pelosi came up with made absolutely no sense. Trickle down at least theoretically some money makes it down. Does bubble up mean the money gets sucked out of the bottom straight to the top? 

 

The funny thing is if the dems manage to actually win. If it is Biden that's pretty doubtful. Seeing Cuomo speak everyday highlights just how terrible Biden is as a candidate. Not because I like Cuomo's policies, but because he knows what room and state he is in, what month it is, what office he holds etc. It's a day and night difference.

 

So if the dems win the funny part will be is all the money is already spent. The green deal will already be well under way as nobody drives or flies. The problem of evil corporations will be solved as they will all go tits up. Suddenly there is no money left for the dems to steal. 

 

This whole ordeal has highlighted how feckless the government is. They literally can't accomplish anything on their own. But if the economic system of capitalism falls we can look forward to seeing how the government can take care of everybody. 

 

Looking forward to that monthly UBI when nobody has a job and pays taxes.

[Iron Tongue]

12 hours ago, marko kok prong said:

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

Federal job salaries in US are public record.  His pay is between $131-255k a year.

 

He could make 5x-50x that in the public sector.

[Redline]

https://www.forbes.com/sites/danielaraya/2020/03/31/the-revolution-after-the-crisis/#3918bb8e101e
 

Interesting article 

some speculation, but entertains viable possibilities 

[samran]

7 hours ago, Cryingdick said:

This whole ordeal has highlighted how feckless the government is. They literally can't accomplish anything on their own. But if the economic system of capitalism falls we can look forward to seeing how the government can take care of everybody. 

A bit like there are no atheists in a foxhole, everyone is a socialist when the world turns to poo.

 

As for the US governments poor response. I suspect that is an in-built in feature of your system. The traditional distrust of government in the US means you’ve got a pretty sh1tty government as a result. 
 

At a time like this I’m impressed by the Australian governments response to what is happening there. A little like Americans we have a slight distrust of politicians, but at the end of the day we don’t consider them an illegitimate part of the landscape - despite the best attempts of fringe dwellers to white-ant and vilify the institutions of state.
 

Nothing wrong with capitalism. I’m a capitalist - run my own business and eat what I kill etc etc. I’m buying shares as all this goes down. Plenty of us are.

 

But if you understand economics the you understand there is such a thing as market failure. And there is only one thing that has proven time and again that can help in that time.
 

Government. 
 

Australia got through the GFC unscathed, mostly due to the advice of the guy interviewed in the link below. I think as a country we are betting it happens again - albeit with a few more scratches. 

https://www.theage.com.au/politics/federal/this-is-not-hibernation-it-s-life-support-ken-henry-on-the-covid-19-economic-shock-20200403-p54gyb.html

[Sydebolle]

14 hours ago, bristolboy said:

You actually believe that Thomas Jefferson said that? It's utterly obvious that this quote is a fake. Ya think back then "deflation" and "inflation" were terms used as part of the economic discourse?

Maybe yes, maybe no - I was not around then. Yet it makes sense what he said and he is known to be able to say such a thing! 

[FritsSikkink]

22 hours ago, Mick501 said:

Shudder to think how many times the economic damage will be magnified  with economic mismanagement of Democrats and the like.   Imagine if they were locked in to some ridiculous climate policy at the same time!

Why? Trump can help MAGA for another 4 years again. Don't tell me you are in doubts about his reelection now.

He is doing such a great job (ROFL). 

Edited April 4, 2020 by FritsSikkink

[metisdead]

An off topic baiting post and the subsequent off topic replies have been removed.

 

Other off topic posts and replies have been removed. 

[bristolboy]

The Trump administration is reminding people they can sign up for Obamacare coverage if coronavirus cost them their jobs — even as it fights to eliminate the law

 

• The Trump administration reminded newly jobless Americans they can still opt to sign up for health insurance under Obamacare on Friday.
• People who lose their jobs qualify to sign up for an Obamacare plan for up to 60 days...
• Trump recently refused to reopen the federal exchanges for people to obtain health insurance, even as 10 million Americans filed for unemployment last month.

https://www.businessinsider.com/trump-administration-obamacare-coronavirus-health-insurance-job-losses-2020-4

[RocketDog]

On 4/3/2020 at 3:02 PM, bristolboy said:

He's a member of the federal reserve not a captain of industry. Not even a lieutenant.

So that means he probably was a captain at one time. It's a revolving door for these guys. 

[riclag]

On 4/3/2020 at 8:58 AM, webfact said:

"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,"

 The greatest economy President  besides FDR. Infrastructure,Infrastructure, Infrastructure,Infrastructure !  It creates manufacturing and jobs jobs jobs!

 Mr. Trump can do it again! Hopefully the radical  socialist dems  and their propaganda machine will comply!  

https://www.realclearpolicy.com/articles/2019/12/30/the_cost_of_the_msms_anti-trump_crusade_111343.html

Edited April 6, 2020 by riclag

[metisdead]

A troll post and the reply has been removed. 

[bristolboy]

5 hours ago, riclag said:

 The greatest economy President  besides FDR. Infrastructure,Infrastructure, Infrastructure,Infrastructure !  It creates manufacturing and jobs jobs jobs!

 Mr. Trump can do it again! Hopefully the radical  socialist dems  and their propaganda machine will comply!  

https://www.realclearpolicy.com/articles/2019/12/30/the_cost_of_the_msms_anti-trump_crusade_111343.html

The fact is that it's not the Democrats or as you call them the "radical socialist dems" who are in opposition to a 2 trillion dollar plan. 

Nancy Pelosi cheers Trump’s call for infrastructure bill as she unveils Democrats’ plan

 

• House Speaker Nancy Pelosi says she wants to move forward with an infrastructure proposal after the House’s planned return on April 20. 
• Democrats outlined an infrastructure plan that would include health funding, expanded broadband access, and improvements to roads, bridges and public transit systems. 

https://www.cnbc.com/2020/04/01/coronavirus-update-nancy-pelosi-proposes-infrastructure-bill.html

 

It's the Republicans:

 

Trump Calls for New $2 Trillion Infrastructure Bill

Whether chambers of Congress take up a fourth round of legislation is unclear, as Senate Majority Leader Mitch McConnell (R., Ky.) said Tuesday morning he wasn’t sure it would be necessary to craft another bill.

“I think, first, we need to see what the effect of the current bill is,” Mr. McConnell said on “The Hugh Hewitt Show.” “Let’s see how things are going and respond accordingly.”

https://www.wsj.com/articles/trump-calls-for-new-2-trillion-infrastructure-bill-11585668373

 

And it seems truly bizarre that you would link to an article about how the mainstream press allegedly distorts the facts when it's clear that's what you've done here.