The United States could lose as many as 4.5 million jobs due to coronavirus from April through June, according to a new survey. Moreover, less than half of these jobs will be recovered by the end of 2021, according to economists polled in the survey. The US economy is expected to decline sharply over the next few months, as the country continues to struggle to contain the spread of coronavirus.
Unemployment claims topped 6 million in the week ended April 4, according to reports filed by the Labor Department on Thursday. The United States has emerged as the new epicenter for coronavirus, with more than 466,500 cases and deaths nearing 17,000.
Job loss could hit record high
Job losses could hit an all-time high if the coronavirus crisis continues for a few more months. According to the median estimate of 45 economists surveyed by the National Association for Business Economics, job losses could hit 4.5 million from April through June, as the US economy has come to an almost standstill.
What is scarier is that of these only around 1.9 million jobs will be added back through 2021. Per the forecasters, unemployment rate could peak to 12% in the second quarter of 2020 compared with 4.4% in March. The rate will fall only as low as 6% by the end of 2021. Conditions are likely to improve slightly with aggressive support in the form of fiscal and monetary stimulus.
However, that will follow a massive contraction in the second quarter of 2020, with the median forecast of the economists polled expecting the GDP to fall at an annualized rate of 26.5% in the April to June quarter. The predictions are in line with the recent forecasts made by other experts and some Fed officials.
Crisis looms large on US economy
According to the most pessimistic predictions, the US economy will slash more than 10.4 million jobs in the second quarter, with losses continuing into early next year. However, the brightest prognosis is that of around 1 million job losses over the next three months followed by a gain of 4.5 million jobs in the next quarter.
Experts say that the US economy is already in recession and will remain in contraction through the first half of 2020 as Covid-19 continues to halt all economic and business activities. The survey report comes just a day after the Department of Labor reported that more than 6.6 million Americans have applied for unemployment benefits for the week ended April 4, bringing the three week total to almost 17 million.