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Federal Reserve Bank of Cleveland President Loretta Mester said U.S. unemployment could rise as high as 15 per cent as the U.S. forcibly shuts down important parts of its economy to help contain the coronavirus pandemic.
About 10 million Americans lost their jobs over the past two weeks, based on initial jobless claims reported Thursday -- far exceeding forecasts. The numbers mean unemployment may already be approaching 10 per cent, nearly matching its peak following the financial crisis of 2008-09, as fallout from the contagion ravages the labor market.
“I was anticipating that in the first half of the year we were going to have some really bad numbers, and seeing that number today just confirms how bad it is,” Mester said in a telephone interview with Bloomberg News.
“You don’t like to see those numbers because it means people really are impacted by this,” she said. “It will take some time to get it back down, and we’ll see a big hit to output growth in the second quarter because we’ve shut the economy down.”