U.S economy faces record-breaking decline, unemployment may surge to 16%
The inactivity currently faced by the U.S. economy due to the virus pandemic appears to be the sharpest contraction that will likely boost the national unemployment rate by up to 16% or higher. The steep forecast requires large volumes of stimulus to ensure economic recuperation, a White House economist said on Sunday.
“This is the biggest shock that our economy, I think, has ever seen. We’re going to be looking at an unemployment rate that approaches rates that we saw during the Great Depression,” President Donald Trump’s adviser, Kevin Hassett said.
The Congressional Budget Office forecasted gross domestic product to contract by 40% and the unemployment rate to peak at 16%, far sharper than the previous record of 3.5% before the pandemic.
Implemented restrictions aimed at combating the coronavirus pandemic have taken a toll on the U.S. economy as businesses were halted and the unemployment rate drastically increased. More so, 2.65 million Americans were recorded to have filed for unemployment amelioration since mid-March while retail sales, homebuilding, and consumer confidence all projected weak data.