As they lowered their 2021 growth outlook and forecast an unemployment rate at 10 percent at a minimum through the first quarter of that year, JPMorgan Chase & Co. economists reportedly see the country’s pandemic recovery occurring more sluggishly than thought in the past.
The economists, led by Michael Feroli, said in a note that the lockdowns of economies in states will lead to a 40 percent annualized drop in gross domestic product (GDP) and a measured recovery in the latter half the year, Bloomberg reported.
A separate survey, which Adam Blandin and Alexander Bick held in cooperation with the Federal Reserve Bank of Dallas, had found that unemployment reached almost 25 percent in the week of May 10 to May 16. U.S. workers who were not in the labor force as companies closed during the past two months will begin seeking work as the economy slowly recovers in the latter half of 2020 per the report.
As a result, they would join the ranks of the unemployed in the country up to the point they locate a position. The JPMorgan economists said per the report, “As the lockdown eases some of these non-participants are likely to emerge from home and become formal jobseekers. This development should slow the decline in the unemployment rate.”
The news comes as the number of workers who registered jobless claims dropped a bit again this week, but the pandemic has put 38.6 million Americans on unemployment since it struck in March per the newest Department of Labor (DOL) data.
Seasonally adjusted jobless initial claims were 2.4 million for the week concluding May 16, which marked a 249,000 decline from the revised level in the past week.
The DOL noted in a statement that COVID-19 “continues to impact the number of initial claims and insured unemployment.”
The four-week moving average was 22 million, marking a rise of 2.3 million from the revised average for the past week.
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