WASHINGTON Reuters - If the United States falls into a recession, it would likely be relatively short, with only modest increases in unemployment, and may look like U.S. downturns in the early 2000s, an International Monetary Fund official said on Friday.
Nigel Chalk, deputy director of the International Monetary Fund's Western Hemisphere Department, said the depth of any recession would depend on the size of the shock, which would push the U.S. economy off its IMF-predicted path of narrowly avoiding recession, and strong household balance sheets would provide a cushion.
There is a lot of savings sitting in the system that would support demand, and the labor market is historically tight, Chalk said at a news conference on the IMF's review of U.S. economic policies. Since all of those things would help support the economy, it should pass relatively quickly and have a relatively quick recovery after being hit by negative shock.