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Twelve percent of the working population might be unemployed due to COVID-19 economic impacts.
The Congressional Budget Office (CBO) forecasts that the United States might experience a 12 percent unemployment rate and a 7 percent loss of its Gross Domestic Product (GDP) by the end of this year's second quarter.
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"GDP is expected to decline by more than 7 percent during the second quarter. If that happened, the decline in the annualized growth rate... would exceed 28 percent. Those declines could be much larger, however," the CBO announced in its latest economic forecast.
On March 14, the House of Representatives approved the “Families First Coronavirus Response Act” (HR 6201), which seeks to counteract a decrease in economic activity that could easily lead to a recession
This act implies authorizes disbursement of US$2 trillion, the largest fiscal stimulus package in U.S. history, which is aimed at expanding unemployment coverage, direct cash transfers to households, and funds to subsidize small and medium-sized companies.
"The unemployment rate underlying the cost estimate for HR 6201 was 12 percent in the second quarter... The analysis incorporated an expectation that the current extent of social distancing across the country would continue... for the next three months," the CBO recalled.
Great/ depressing graphic on US unemployment! Wait for it.... https://t.co/YCYrjccttW
— Reed’s Economics and Business (@ReedsEconBis) April 3, 2020
The Bureau of Labor Statistics reported on Thursday that the U.S. unemployment rate increased from 3.5 percent in February to 4.4 percent in March.
“The number of unemployed increased by 1.35 million to 7.14 million, while the number of employed declined by 2.99 million to 155.77 million,” outlet Trade Economics.
“The numbers are expected to get even worse in April as the government surveyed... in mid-March before the majority of people was under some form of a lockdown,” it explained.
This means that the US economy lost at least 701,000 jobs in the last month and thus broke the trend of 113 consecutive months of growth.
However, the figure only hints at the start of the COVID-19 crisis as recommendations for confinement in the United States began to be adopted in mid-March.
Jobless claims in the United States have increased from 3.28 million to 6.64 million over the last two weeks, an increase that reflects the impact resulting from the COVID-19 pandemic.
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