US Unemployment To Skyrocket To 30%
Posted by Brian Ford on March 24, 2020
In an interview with Bloomberg yesterday, James Bullard, the president of the St. Louis branch of the Fed, predicted unemployment to hit 30% in the second quarter. To put that in perspective, unemployment after the Great Recession peaked at 10.2%. During the Great Depression it maxed out at 24.5%. Current unemployment is around 3%. So per the Fed, unemployment will increase by a whopping 1,000% within the next few months.
As the US begins to shut down in phases to implement social distancing, many businesses have been forced to close their doors. Restaurants, bars and the hospitality industry have been some of the hardest hit. Most small business owners can’t afford sales completely drying up for a few months (let alone longer) as seen in the chart below.
While a few owners are trying to “do the right thing” and pay employees during these trying times, this can only go on for so long. There will come a breaking point within the next few months as owners are forced to lay employees off or face financial destruction themselves.
Just last week over 281,000 Americans filed for unemployment, a 400% increase from the week prior. What are these numbers going to look like in a month from now, 2 months from now?
The estimated job losses over just the last few weeks range from 500,000 to a stunning
5 million.
And let’s keep in mind, this crisis could last another 6 -18 months per the experts.
The economic impact of the Covid-19 is yet to be determined, but rest assured it will be disastrous.
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