America has done something extraordinary, perhaps unprecedented. In the face of a looming public health crisis, with potential deaths in the thousands or even millions, we essentially made a collective decision to have ourselves a recession. We’ve shut down a significant portion of our economy, knowing that the result will be businesses going bankrupt, huge job losses and people losing their homes.
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... Josh Bivens posted an analysis Tuesday using Goldman Sachs projections of 0 percent growth in the first quarter of this year and a 5 percent contraction in the second quarter. It estimated that we will lose 3 million jobs by summer.
But then on Wednesday, JP Morgan forecast that the second quarter contraction would be a stunning 14 percent — worse than the depth of the Great Recession. If they’re right...it would translate to 7.5 million jobs lost by the summer.
In the Great Recession, about 8 million jobs disappeared. Now some are predicting that the drop in payrolls for April alone could be as high as 5 million.
... Josh Bivens posted an analysis Tuesday using Goldman Sachs projections of 0 percent growth in the first quarter of this year and a 5 percent contraction in the second quarter. It estimated that we will lose 3 million jobs by summer.
But then on Wednesday, JP Morgan forecast that the second quarter contraction would be a stunning 14 percent — worse than the depth of the Great Recession. If they’re right...it would translate to 7.5 million jobs lost by the summer.
In the Great Recession, about 8 million jobs disappeared. Now some are predicting that the drop in payrolls for April alone could be as high as 5 million.
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Jesse Rothstein, an economist at the University of California-Berkeley, was even more pessimistic. “There’s no question it’s worse than 2008-2009," Rothstein said. "The short-term shock is massively worse.”
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“Usually the shocks aren’t quite this dramatic,” [Betsey] Stevenson agreed. Recessions are often set off by some kind of shock, but it’s usually preceded by a period of slowdown or uncertainty. Now we’ve gone from 60 to zero in days.
Forecasts from Goldman Sachs, JPMorgan and Bank of America all assume the economy will bounce back in the third and fourth quarters of this year. But Rothstein warns that might not be the case even if we get the virus under control.
“Certainly a lot of people are deferring consumption and postponing vacations,” and they might start spending that money again fairly quickly, Rothstein said, adding: “On the other hand, there are a lot of people losing their livelihoods.”
Jesse Rothstein, an economist at the University of California-Berkeley, was even more pessimistic. “There’s no question it’s worse than 2008-2009," Rothstein said. "The short-term shock is massively worse.”
...
“Usually the shocks aren’t quite this dramatic,” [Betsey] Stevenson agreed. Recessions are often set off by some kind of shock, but it’s usually preceded by a period of slowdown or uncertainty. Now we’ve gone from 60 to zero in days.
Forecasts from Goldman Sachs, JPMorgan and Bank of America all assume the economy will bounce back in the third and fourth quarters of this year. But Rothstein warns that might not be the case even if we get the virus under control.
“Certainly a lot of people are deferring consumption and postponing vacations,” and they might start spending that money again fairly quickly, Rothstein said, adding: “On the other hand, there are a lot of people losing their livelihoods.”
