JPMorgan forecasts 20% unemployment and a 40% hit to second quarter GDP by skleb1234
John Locher/ASSOCIATED PRESSAs the coronavirus continues to take a toll on markets and business activity, top banks on Wall Street have further revised down their forecasts for second-quarter GDP and unemployment, predicting an even greater economic hit from the coronavirus than first expected.
JPMorgan was the latest big bank to cut its second-quarter GDP forecast even more, with its economists now foreseeing a 40% decline. The bank had earlier predicted a 25% hit to second-quarter GDP.the more dire forecast following Thursday’s latest jobless claims report, which showed another 6.6 million workers filed for unemployment. Over 16 million Americans have filed for unemployment benefits in the last three weeks, the latest indicator of how badly the coronavirus is impacting the economy.
Those numbers indicate a huge surge in job losses, which JPMorgan economists estimate could amount to 25 million in April, with the unemployment rate hitting 20%. Top firms have largely struggled to gauge the impact of the coronavirus shutdowns on the economy, with many of the big banks now seeing a more than 30% hit to second-quarter GDP.
Morgan Stanley, for instance, lowered its forecast for the second quarter after severe job losses and more business closures in March: The bank now expects GDP to fall 38%, after originally forecasting a 30% contraction.
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