Following a widely predicted and dramatic downturn in the U.S. economy over the next three months, a panel of top business economists see high unemployment persisting for over a year in an outcome that would douse expectations for a swift, post-pandemic return to normal. According to the median estimate of 45 forecasters surveyed by the National Association for Business Economics, the number of jobs lost by the crisis-driven sudden stoppage of the US economy could reach 4.5 million.
The prognosis is consistent with other recent economists and some Fed officials forecasting this. The scope of NABE survey responses demonstrated the confusion economists have about what happens when large parts of an economic system are literally shut down, as a result of efforts to curb coronavirus spread in this case. The responses included forecasts of a complete 50 per cent drop in GDP in the second quarter.
Estimates at the other extreme saw a 1 per cent decrease in GDP in the second quarter, and a 20 per cent rocket-like turnaround from there with millions of jobs generated and unemployment dropping rapidly. However, the median result of continued job loss is sobering in the face of trillions of dollars in new measures that have been funded by the Fed, Congress and Trump administration in recent weeks to try and keep the economy “whole” during the pandemic and ready and restart after the health crisis passes.