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US Unemployment Rate Likely to Hit 1940 Levels - Federal Reserve Vice President

© AP Photo / Rick BowmerPeople line up outside the Utah Department of workforce Services Monday, April 13, 2020, in Salt Lake City.
People line up outside the Utah Department of workforce Services Monday, April 13, 2020, in Salt Lake City. - Sputnik International
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WASHINGTON (Sputnik) - The US unemployment rate is likely to be highest in 80 years due to the measures undertaken to fight the novel coronavirus (COVID-19) pandemic and the labor market’s recovery will take longer than the economy’s, Federal Reserve Vice President Richard Clarida told CNBC.

"We’re living through the most severe contraction in activity and surge in unemployment that we’ve seen in our lifetimes," Clarida said on Tuesday. "Unfortunately the unemployment rate is going to surge to numbers that we’ve not probably seen since the 1940s."

At least 30 million Americans filed for first-time unemployment benefits in the six weeks up to 1 May, the Labor Department said.

Clarida said the unemployment numbers that will be available soon are going to be very elevated and the course of the economy will depend on the course of the virus’ range of scenarios.

"There can be a rebound in the economy once businesses reopen and people return to work. But I think realistically, it's going to take some time for the labor market to fully recover from the shock. That's very uncertain at this point. I do think (economic) recovery can commence in the second half of the year," Clarida said.

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