China News Service, May 14 (CBS), according to the report of the investment bank Goldman Sachs on the 12th, due to the impact of the new crown epidemic, the peak unemployment rate in the United States may reach 25%, which is equivalent to the last century. The highest unemployment rate during the Great Depression in the 1930s.
According to reports, economists had hoped that as many states in the United States reopened businesses closed due to the new crown epidemic, the US economy would recover relatively quickly. But according to the latest report released by Goldman Sachs Bank, the unemployment rate in the United States may soar to 25% from 14.7% in April this year. More than one-third of American workers may be unemployed.
Goldman Sachs economists said: "(Economic) weakness may cause serious traumatic effects, such as permanent layoffs and corporate closures, thereby delaying recovery."
On May 7, local time, the Washington Potato Commission of the United States organized an event in Auburn City. Volunteers distributed bagged potatoes to the public. Due to the epidemic situation, these potatoes are facing slow sales due to clogged supply chain.
Goldman Sachs believes that as economic activity resumes, US economic growth will accelerate in the second half of 2020. By the end of 2020, the US unemployment rate will remain at around 10%, which is the highest level during the 2009 US economic crisis. "It may take several years for the (US economy) to return to the level before the virus broke out," the report said.
Goldman Sachs estimates that due to the almost complete closure of auto factories, US manufacturing output fell by 25% in the first quarter and construction spending fell by 35%. Various types of consumer expenditures, which account for more than two-thirds of economic activity, fell by 20%.
According to reports, an April study by the University of Illinois, the University of Chicago, Harvard Business School and the US National Bureau of Economic Research found that as many as 100,000 US small businesses may have been permanently closed. Researchers have found that three-quarters of companies have "poor financial conditions" and the cash on hand is only enough to survive for two months.
At the same time, a survey by the National Food and Beverage Association showed that as of the end of March, 3% of restaurants were permanently closed. This means that across the United States, 3 million food companies will no longer exist.
On the 13th local time, Fed Chairman Powell said: "The scale and speed of this recession is unprecedented in modern history and is more serious than any recession since World War II." "The employment growth of the past decade has been wiped out."
Powell pointed out that nearly 40% of low-income families who worked in February lost their jobs in March. "This reversal of economic destiny has caused indescribable suffering, and people's lives have been subverted in great uncertainty about the future."