May 5, 2020 / 7:50 PM / a month ago

Fed's Clarida says U.S. unemployment could surge to worst level in decades

May 5 (Reuters) - The U.S. economy is likely to contract sharply during the second quarter as a result of intentional business shutdowns in response to the coronavirus pandemic, but there is a chance the recovery could start in the second half of the year, Federal Reserve Vice Chair Richard Clarida said on Tuesday. “We’re living through the most severe contraction in activity and surge in unemployment that we’ve seen in our lifetimes,” Clarida said during an interview with CNBC. While the unemployment rate could surge to levels not seen since the 1940s, Clarida said the Fed was using all of its tools to help the recovery be as strong as possible when it begins.

Reporting by Jonnelle Marte Editing by Leslie Adler

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