Economists at ANZ Bank recap the outlook for the US unemployment rate.
“The St Louis Fed predicts potential job losses of over 46m for 2020. This would translate to a 32.1% unemployment rate, which would be the highest ever. Currently, the peak stands at 24.9%, which occurred in 1933 during the Great Depression.”
“An alternate official estimate by the CBO is far more conservative; it estimates unemployment will exceed 10% in Q2.”
“The Job Quality Index suggests that around 37m American workers are at risk. This represents around 23% of the workforce. On the other hand, a report from the Brookings Institute suggests around 24m workers are at risk, which is over 15% of the workforce. If all of these workers were stood down, the unemployment rate would rise to roughly 27% (Job Quality Index) and 19% (Brookings Institute).”
“The COVID-19 shock could result in the pool of unemployed rising by 25m. This would result in the unemployment rate rising to just under 20% in Q2.”