Join HW+
Lenders, are you prepared for 2022's challenges?
5 predictions for the 2022 housing market
Lunch & Learn : The Role of Appraisers in the Future of Valuation
David Stevens on mortgage industry consolidation
CoronavirusPolitics & Money
Testing is key to restarting the economy, Yellen says
Pandemic has created a "huge, unprecedented, devastating hit," former Fed chairman says
April 7, 2020, 2:38 pm By Kathleen Howley
Restarting the U.S. economy comes down to the availability of testing to identify the carriers of COVID-19 and protect the uninfected, according to former Federal Reserve Chairman Janet Yellen.
Absent that, many Americans will stay in their homes, even if states lift restrictions, and not engage in the consumer spending that accounts for about 70% of U.S. GDP, she said.
"Our focus needs to be on testing and trying to get the pandemic under enough control so that we can begin to restore business activity," Yellen said in an interview with CNBC on Monday.
Yellen said the pandemic has created a "huge, unprecedented, devastating hit" to the economy that could result in second-quarter GDP dropping a record 30% from a year ago, though it's not in the same category as the Great Depression.
"Unemployed rates for a time may go to depression levels, but this is very different than the Great Depression or the recession in the U.S. economy that we experienced in 2009 and after," Yellen said. "We started with an economy that was in good shape, with a financial sector that was basically sound," she said.
"This is a health crisis," said Yellen, who always made clear to the press that her preferred title was chairman of the Fed, instead of chairwoman. "It's having severe economic effects, but if we're successful in supporting people's income during this time, as the government can be, I believe we will be able to get back to a normally functioning economy in much shorter order than after the Great Depression or even the Great Recession."
Last week's initial claims data measuring the number of people who apply for unemployment was "absolutely shocking," Yellen said. In that report, the Labor Department said the number of people seeking unemployment benefits more than doubled to 6.65 million from the prior week's record number, boosted by a bill passed in Congress that extended eligibility to gig workers.
Yellen pointed out that many of those people who lost their jobs reported being on a temporary layoff.
"It's heartening, in the recent employment report, even though it's stale, to see that a lot of the unemployment was temporary job loss," Yellen said. "That suggests workers are still connected to their firms, and if activity can restart that they'll be able to go back to their old jobs."
The number of unemployed persons who reported being on temporary layoff in March more than doubled to 1.8 million while the number of permanent job losses rose to 1.5 million, the Bureau of Labor Statistics said on Friday.
The unemployment rate rose to 4.4% in the labor report, which is based on surveys conducted during the first half of the month. Most of the job losses related to the pandemic occurred in the final week of March and won't show up in the data until the April report is released in the first week of May, Yellen said.
"If we had a timely unemployment statistic, the unemployment rate would probably be up to 12 or 13% at this point, and moving higher," Yellen said.
Yellen has suffered some of the same anxieties as other American families during the pandemic, according to the Washington Post. Her son was quarantined in the basement of her Washington D.C.-area home for two weeks after flying back from London last month and getting caught in massive lines at the airport that prevented him from practising social distancing.
"Yellen, one of the world's top economists, leaves plates of food for him at the top of the basement stairs," the March 20 article said.
Guaranteed Rate closes Stearns wholesale channel
Chicago-based Guaranteed Rate will discontinue its third-party wholesale channel, Stearns Wholesale Lending, just one year after it acquired the multichannel lender.
Jan 12, 2022	By Flávia Furlan Nunes
Housing inventory crisis continues in 2022
Jan 12, 2022By Logan Mohtashami
Mortgage delinquency rate reaches prepandemic levels
Supreme Court orders review of recession-era class action against Rocket
FHFA hikes fees for high-balance and second-home loans
Jan 05, 2022By Georgia Kromrei
Jan 10, 2022By Frank Nothaft
Wells Fargo reports lower GOS and origination volume in Q4
Wells Fargo originated $48.1 billion worth of mortgages in the fourth quarter, down from $51.9 billion in the previous quarter.
Jan 14, 2022	By Maria Volkova
Jan 14, 2022By Allison La Forgia
CEO Matt Widdows pushes HomeSmart toward IPO
Jan 14, 2022By Matthew Blake
Here are 7 trends to watch in the 2022 appraisal market
Jan 14, 2022By Brian Zitin and Ken Dicks
Non-QM lenders hunt for LOs as consumer-direct model falters
Agents scramble to meet demand…in Rochester?
Jan 14, 2022By Brooklee Han
How one company aims to put lenders at the forefront of online home search
Mortgage Cadence Releases Next Generation Loan Origination Software
The non-QM outlook for 2022
How servicers can support the most vulnerable as moratoriums lift
Hosted By	Stavvy
Why It's Time for Foreclosure Tech Innovation
Hosted By	Mortgage Capital Trading
Staying prepared in a changing mortgage market
By	Doma
Taking a Page from Big Lenders to Achieve Game-Changing Speed
By	ServiceLink
3 Myths about Instant Title Lenders Should Stop Believing
By	FileInvite
Five levers for lenders to increase sales velocity
HousingWire
Engage Events
Editors' Choice Awards
Real Estate Enthusiasts
Advertise With HW
HW Content Solutions
Download Rate Card
HW Media HQ
© 2006-2022 HW Media, LLC. All rights reserved. Site by Trew Knowledge.
Log in with LinkedIn OR
Don't have an account? Please Sign Up