Fed predicts worsening economy, joblessness

The US Federal Reserve  noted  Wednesday that the deadly new coronavirus outbreak has caused a plunge in economic activity and surge in job losses in the United States.

Fed officials estimate that the economy will shrink by 6.5 percent this year, in line with other forecasts, before expanding by 5 percent  in 2021. They foresee the unemployment rate at 9.3 percent, near the peak of the last recession, by year’s end. The rate is now 13.3 percent..

The projections suggest that the Fed doesn’t see the economy fully recovering from the recession until 2023.

“My assumption is that there will be a significant chunk — well into the millions — of people who don’t get back to their old jobs,” Federal Reserve Chairman Jerome Powell said. “It could be some years” before they find work.-AP