Thursday, March 26, 2020

Unemployment Rate Could Rise to 32.1%

Researchers at the Federal Reserve Bank of St. Louis are working furiously to measure the economic fallout from the coronavirus pandemic. In the past few days, the St. Louis Fed has released one report after another estimating the dimensions of the economic crisis now facing the United States.

—The researchers have determined the number of Americans who work in close proximity to others and therefore must stop working to prevent the spread of coronavirus (27 million).
—They have calculated the percentage of workers at risk of unemployment because of the coronavirus (46 percent).
—They have tallied up the cost of unemployment insurance to tide those workers over (ranging from $57 billion to $642 billion).
—They have done a "back of the envelope" estimate of the unemployment rate by the end of the second quarter of 2020. Brace yourself. It could be as high as 32.1 percent.

For more details about these findings, click on the links below.

Source: Federal Reserve Bank of St. Louis; Fernando Leibovici, Ana Mara Santacreu, and Matthew Famiglietti, Social Distancing and Contact-Intensive Occupations; Charles Gascon, Covid-19: Which Workers Face the Highest Unemployment Risk?; Bill Dupor, The Efficacy of Enhanced Unemployment Benefits During a Pandemic; and Miguel Faria-e-Castro, Back-of-the-Envelope Estimates of Next Quarter's Unemployment Rate

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