Early estimates suggested that the U.S. economy would experience a minor bump from the COVID-19 pandemic. Now that the coronavirus has produced such devastation, forecasts are being modified.
According to Morgan Stanley economists, the gross domestic product (GDP) will plunge 30.1 percent in the second quarter, lifting the unemployment rate to as high as 12.8 percent during the April-to-June period.
Scary. That is some serious economic pain.
“Economic activity has come to a near standstill in March,” the Morgan Stanley economists said. “As social distancing measures increase in a greater number of areas and as financial conditions tighten further, the negative effects on near-term GDP growth become that much greater.”
Is the U.S. on the brink of a depression?
Well, Federal Reserve Bank of St. Louis President James Bullard is anticipating a 30 percent jobless rate and a monumental 50 percent drop in GDP.
The Bank of America projects a 25 percent contraction, while JPMorgan Chase expects a 14 percent drop. Goldman Sachs thinks the global economy will slump one percent.
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