New analysis by the Congressional Budget Office offered “incredibly sobering” projection for unemployment levels for the coming two years as the U.S. recovers from the coronavirus pandemic.
According to the nonpartisan government office, the unemployment rate is projected to average 14% in the second quarter of 2020 and reach 16% by the end of the third quarter.
Some incredibly sobering numbers from the CBO:
— Caitlyn Kim (@caitlynkim) April 24, 2020
– Federal budget deficit is projected to be $3.7 trillion
– Unemployment rate for Q2 is expected to average 14%, Q3 will average 16%
– Federal debt held by public 101% of GDP by end of fiscal yearhttps://t.co/aMEpMoNjSG
The unemployment rate for 2021 is projected to be 10.1% at the end of that year—slightly higher than the worst monthly rate during the Great Recession that resulted from the 2008 economic meltdown. During that crisis, the highest unemployment rate was 10%, a rate which lasted for one month.
The analysis “means at least a year of unemployment that’s worse than the Great Recession,” Washington Post correspondent Heather Long tweeted.
The Congressional Budget Office is predicting 1 in 10 American workers will still be out of a job in 2021.
— Heather Long (@byHeatherLong) April 24, 2020
That means at least a year of unemployment that's worse than the Great Recession. https://t.co/TpMa4Us9ar
The agency’s projection contrasted sharply with the rhetoric of the Trump administration. President Donald Trump on Thursday suggested many jobs would be filled again by August, and told reporters, “I think our economy will start to pick up very substantially, as soon as the states get open.”
The CBO’s analysis is “incredibly significant,” wrote PBS Newshour correspondent Lisa Desjardins, as it counters the president’s overall message about the state of the economy and the ability the government has to safely order businesses to reopen and Americans to return to daily life.
Folks, take a look at this.
— Lisa Desjardins (@LisaDNews) April 24, 2020
CBO Forecasts:
– the United States will have a deficit of $3.7 Trillion this year.
– Total debt will = 101% of GDP
– Unemployment will average 15% thru mid-September.
– THIS. Unemployment will stay high, dropping to 9.5% only "by the end of 2021".
Although the CBO wrote in its analysis that economic activity is expected to increase in the third quarter of 2020, it emphasized that “challenges in the economy and the labor market are expected to persist for some time.”
The high unemployment rates in the second and third quarters of this year will reflect “a projected loss of nearly 27 million in the number of people employed and the exit of roughly 8 million people from the labor force.”
Currently, more than 26 million Americans have filed jobless claims in the past five weeks as businesses were forced to close to slow the spread of the coronavirus. That brought the unemployment rate to an estimated 13%—already the highest level since the Great Depression.
As Common Dreams reported earlier this month, food banks have reported huge increases in the number of people they are serving as workers are laid off or furloughed, with one investigation finding that a third of people using food banks at the beginning of April—when the number of unemployment claims stood at 6.6 million—had never before needed assistance.
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