Any U.S. recession would likely be short, shallow, IMF official says

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FILE PHOTO: The IMF logo is seen outside the headquarters building in Washington

WASHINGTON – If the United States does fall 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 IMF’s Western Hemisphere Department, said the depth of any recession would depend on the size of the shock that 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’s a lot of savings sitting in the system that would help 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. “And since all of those things would help support the economy, so if it was hit by negative shock, it should pass relatively quickly and have a relatively quick recovery afterwards.”

(Reporting by David Lawder; editing by Jonathan Oatis)