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New Forecast: 47M Jobs Lost

Newser — Bob Cronin

The head of the St. Louis Fed predicted last week that US unemployment will hit 30% before the economic damage inflicted by the pandemic is over. An economist at the St.

Louis Fed has written a research paper saying the toll could be even worse: 32.1% unemployment, for a total of 47 million jobs lost. That's considerably higher than during the Great Depression, CNBC reports, when the unemployment rate topped out at 24.9%.

"These are very large numbers by historical standards," economist Miguel Faria-e-Castro wrote in the paper, "but this is a rather unique shock that is unlike any other experienced by the US economy in the last 100 years." Records already are being set: 3.3 million people filed initial claims for unemployment benefits the week ending March 21, a new high.

The projections don't account for everything, researchers say, including workers who may drop out of the labor force; that would hold down the unemployment rate. The economic stimulus legislation just passed isn't factored in, per Forbes; companies will receive subsidies for not laying off employees.

"But don’t get discouraged," said James Bullard, who had made the 30% prediction. The downturn might not last long, he said, per CNBC, and there could be "a good rebound" on the other side.

"At a certain point, we will get the spread of the virus under control," Bullard said. "At that time, confidence will return, businesses will open again, people will come back to work."

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