The US Commerce Department has issued a grim statement regarding the current state of the economy as the coronavirus continues to wreak havoc across the country. In just the first quarter, GDP has been reduced by 4.8%, with even worse declines predicted for the second quarter, according to Federal Reserve Chairman Jerome Powell.
The US Labor Department is scheduled to provide an update on weekly unemployment claims, but a panel of economists surveyed by Reuters are predicting the numbers will be unpleasant. They are predicting that impending unemployment rates for the month of April will surpass the November 1982 record of 10.8%. In March alone, data showed an increase of 0.9% in the unemployment rate, making it the largest monthly change since 1975.
Moreover, according to Andrew Hollenhorst, who is an economist with Citigroup, April and May will most likely account for the largest peak in unemployment numbers, which should then taper off in June once gradual reopening of the economy commences. Nonetheless, this is the largest economic contraction the US has suffered since the financial crisis in 2008, with more than 1 million COVID-19 infections and excess of 61,000 deaths thus far.
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