US unemployment could hit 25% as 20.5 million lost jobs: Fed Chairman

Federal Reserve Chair, Jerome Powell, reportedly warned that the US unemployment rate could rise to 25 per cent amid the coronavirus pandemic. Although, he said while speaking to a state broadcaster, that the economy should recover more quickly than during the Great Depression when joblessness reaches spike. The number sounds about right for what the peak maybe, he reportedly said on US national television. 

This comes after a central bank revealed that an unprecedented 20.5 million Americans reportedly lost their jobs in April and the unemployment rate in the US jumped to 14.7 per cent. Further, according to the Federal Reserve survey, one in five American workers lost their jobs in March, including almost 40 per cent of those in lower-income households.

As per the data released by the US Labour Department, workers filed almost 3 million new unemployment claims in last week as layoffs swept through America’s workforce since the coronavirus outbreak. Nearly 22 million US citizens applied for aid or the economic stimulus benefit in a total of the previous four weeks, which represents, by far, the largest streak of U.S. job losses on record, as per the reports.  

Read: US Unemployment Applications Are Set To Shoot Up Again

Read: US Unemployment Claims Likely To Be Shockingly High Again

Earlier, the Federal Reserve stated that it will keep its key short-term interest rate near zero for the foreseeable future, adding, it was as part of its extraordinary efforts to bolster the economy, US media reports confirmed. Further, it explained, Fed will keep buying Treasury and mortgage bonds to help keep those rates low. 

“The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time,” the central bank said in an unusually sweeping declaration at the top of its statement. 

“Worst-ever” economy

Speaking at a virtual web press conference, the Fed Chairman Powell had earlier said that it is the “worst-ever” economy with only lingering hopes for the rebound from the novel coronavirus. Data for the second quarter has been worse than any data he had seen for the economy as a direct consequence of the disease outbreak, he added. Further indicative of the crisis, he said that the recovery would be “long and painful”. Powell regretted the gravity of the economic downturn caused by the coronavirus, the economy due to which, sank to worst since the 1930s. 

Read: EU To Raise 100B Euros To Tackle Virus Unemployment

Read: Historic Unemployment Rate Upends Trump's Reelection Bid

(Image Credit: AP)