JPMorgan Chase has dimmed its view of the future yet again, now saying the nation's gross domestic product (GDP) could sink by as much as 40 percent in the second quarter due to the coronavirus pandemic, according to CNBC.
That's an increase from the already-dire 25 percent drop JPMorgan previously predicted.
Unemployment, the bank said, could hit 20 percent, with a loss of 25 million jobs.
The bank is still optimistic about what might happen later this year, saying things could bounce back in the fall. That's based on the prediction that the virus will have receded by around June. In that case, the economy could rebound by around 23 percent in the third quarter and another 13 percent in the fourth, with a 10 percent decline in the first quarter.
JPMorgan economists said they had first considered the impact on demand, looking at spending cuts that would come with the rise of social distancing and shutting down of various places where people congregate. Later, they considered the supply-side as well, with the increase in mandates to quarantine and lockdown that forced manufacturing to take a backseat. They said the total picture of the economic disruption was hard to fully quantify but "likely quite large."
In general, economists have not been able to fully calculate the eventual effects of the pandemic and the shutdown. Many firms are now looking at GDP drops of 30 percent — numbers unfathomable to modern times, CNBC reported. JPMorgan said forecasters had been "operating in a fog" as the pandemic wrought its destruction over the past few weeks.
Millions of Americans have been filing for unemployment in the midst of the virus's overturning of American life. The number of those unemployed now surpasses the high from the 2009 recession, which maxed out at 6.64 million.
The biggest increases for the week ending March 28 were in California, up 871,992; New York, up 286,596; Michigan, up 176,329; Florida, up 154,171; Georgia, up 121,680; Texas, up 120,759; and New Jersey, up 90,438.