U.S. in "awfully pale recession," Greenspan quoted

Former U.S. Federal Reserve chairman Alan Greenspan speaks at the Per Jacobsson Foundation Lecture on the "Balance of Payments Imbalances" at the International Financial Corporation in Washington in this October 21, 2007 file photo. (REUTERS/Yuri Gripas)

NEW YORK (Reuters) - The United States has fallen into an "awfully pale recession" and may remain stagnant for the rest of the year, former Federal Reserve chairman Alan Greenspan was quoted on Monday saying.

"We're in a recession," Bloomberg news agency reported Greenspan had said in a television interview. "But this is an awfully pale recession at the moment. The declines in employment have not been as big as you'd expect to see."

Last week a government report showed employers shed jobs in April at a slower rate than had been feared, providing some relief about the slowing economy.

Greenspan doubted there would be an immediate recovery, saying stagnation for the rest of the year was the most likely outcome. "That's certainly the most benevolent scenario," he said. "It's not all that far from being the most probable."

The economy would not start turning around until home prices started settling and eased pressure on finance companies to write off mortgage-related losses, Greenspan said.

Greenspan has said before that the economy is in a recession, although he also said at that time that it was too soon to say how deep or prolonged the downturn would be. His office could not be reached immediately for comment.

(Reporting by Aarthi Sivaraman; editing by David Stamp)