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Recession may already be over, Fed’s Clarida says

Fed Vice Chairman Richard Clarida said the rebound in GDP has been broad based.

The U.S. recession that began in March with the coronavirus pandemic may already be over, the No.2 official at the Federal Reserve said Wednesday.

“This recession was by far the deepest one in postwar history but it also may go into the record books as the briefest recession in U.S. history, ” Clarida said in prepared remarks to an Institute for International Finance conference.

The flow of economic data since May has been “surprisingly strong,” he said.

Economists surveyed by MarketWatch expect the economy to rebound at a 31.9% annualized rate in the July-September quarter.

The economy sank at a record 31.4% rate in the second quarter.

Clarida said the rebound in GDP has been “broad based,” with only spending on many services continuing to lag.

Some economists worry that the economy might stall in coming months, leading to a “double-dip” recession. Economists taking the long view would likely view this as one lengthier recession.

Read: Anxiety growing over another setback

The Fed vice chairman was not all upbeat though. He said the outlook for the economy was unusually uncertain and depends on the course of the virus.

It will take time for the economy to recover all the lost ground in the recession and he said more help from Fed policy and Congressional spending “will be needed.”

The Dow Jones Industrial Average
DJIA,
-0.54%

was poised to open flat on Wednesday, a day after the market snapped a 4-session win streak.


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