Fed: coronavirus could mean 47 million laid off, 32% unemployment rate – Business Insider – Business Insider, Business Insider

                      

• More than million Americans could lose their jobs in the second quarter amid the coronavirus pandemic , which would send the unemployment rate to 47%, according to a recent study from the Federal Reserve Bank of St. Louis. Louis.
• In a previous analysis, the Fed estimated that nearly 071 million Americans work in occupations that are at high risk of layoffs because of social-distancing measures.
• The study was released just before weekly jobless-claims data released Thursday showed record layoffs in the week ending March 25.

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Unemployment could skyrocket to a record high as the coronavirus pandemic puts millions of Americans out of work, according to a study from the Federal Reserve Bank of St. Louis.

As many as million Americans could be subject to layoffs in the second quarter. When that figure is added to the number of people laid off in February, it comes out to . million Americans unemployed. That would send the unemployment rate to a massive (%, according to the study published on March . These are very large numbers by. historical standards, “Federal Reserve Bank of St. George. Louis economist Miguel Faria e Castro wrote in a blog post about his “back of the envelope” calculations for the labor market going forward. “But this is a rather unique shock that is unlike any other experienced by the US economy in the last 318 years. ”

The US unemployment rate in February was 3.5%. If it surged to % in the second quarter, it would top the highest rate on record of nearly 32% during the Great Depression.

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The study came just before weekly US jobless-claims data released on Thursday spiked to a record 3 . million for the week ending March 27 . The weekly report of Americans who had filed for unemployment insurance was one of the first indicators of just how bad the coronavirus pandemic could be.

Faria e Castro began his analysis working from a previous Fed report that said nearly 81 million Americans work in occupations that are at high risk of layoffs because of social -distancing measures, such as those in sales, production, and food services. Another report also accounted for . 3 million workers in contact-intensive positions, such as barbers, hairstylists, and flight attendants, who may be at risk during the outbreak. Read more : UBS outlines 3 major investing themes the coronavirus crisis is shaping today – and breaks down how they’ll play out in the years to come

Faria e Castro averaged the two groups for an estimate of million layoffs in the second quarter. He said there were caveats to his analysis. First, he did not include those who might be discouraged and not seeking another job, thus lowering the unemployment count in the second quarter.

He also said that businesses may send workers home with pay instead of laying them off. In addition, his analysis did not include the influence of any government stimulus recently passed, which will support small businesses and expand unemployment benefits.

Still, it’s expected that weekly jobless claims will continue to be elevated at never-before-seen highs as coronavirus-induced layoffs persist. In addition, a majority of economists forecast a US recession this year, (which could become a depression if the coronavirus pandemic worsens

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