JPMorgan economists expect the second quarter to be a bad one, with 25 million jobs lost and a sizable chunk taken out of the country’s gross domestic product as the coronavirus pandemic hits its stride.
They foresee a 40% decline in the GDP and a surge in April’s unemployment rate to roughly 20%. Economists previously forecasted the GDP dropping 25% in the second quarter. This all comes as states and local governments continue staggered lockdowns amid the pandemic.
JPMorgan economists are pegging their hopes to a second half recovery based on the assumption that the panic will have subsided by June. (RELATED: Fauci: US Deaths Could Be As Low As 60,000 If We Maintain Current Social Distancing)
“Over the last few weeks forecasters have been operating in a fog. Economic models that have been trained on post-war data face obvious limitations. In their place we have reverted to differing ways to address the outlook,” the economists wrote in a note.
They added: “The long-run destruction of the level of output is difficult to quantify, but likely quite large.” JPMorgan issued the forecast after Thursday’s jobless claims jumped to 6.6 million workers with a decline in hours worked.
The economy ground to a halt as Americans began employing social distancing guidance to combat the coronavirus, or COVID-19, which originated in Wuhan, China, before traveling to the United States, where it has killed more than 13,000 people.
Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact firstname.lastname@example.org.