JPMorgan’s economists signaled even more significant economic ramifications from the COVID-19 pandemic than previously believed, predicting a 40 percent drop in the U.S.’s gross domestic product (GDP) and the country’s unemployment rate rising to 20 percent.
“With these data in hand we think the April jobs report could indicate about 25 million jobs lost since the March survey week, and an unemployment rate around 20 percent,” they wrote, CNBC reported. “Given the expected hit to hours worked this quarter we now look for -40.0 percent annualized real GDP growth in 2Q, down from -25.0 percent previously.”
Despite the grim outlook for the second quarter, the economists also predicted a rebound in the latter half of the year, assuming the country’s economy has restarted and gained some normalcy by June.
According to the network, the group expects 23 percent growth in the third quarter and 13 percent in the fourth quarter.
They also note that experts have had difficulty measuring and predicting the economic impact of the pandemic.
“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,” they wrote.
In the past three weeks, almost 17 million Americans have filed for unemployment, spiking the country’s unemployment rate to around 10 percent.