CBO: Coronavirus pandemic will scar U.S. labor market for the next decade

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The agency is predicting that the unemployment rate in the fourth quarter of 2030 will be 4.4 percent, compared with 3.5 percent in February of this year.

The new projection shows the long-term impact that economists say the pandemic will have on the U.S. economy, the largest in the world. A severe disruption to production and hiring in March and April has had a jarring impact on the United States.The country’s economic outlook over the coming decade has “deteriorated significantly” since the CBO published its full baseline economic projections in January, the agency said.

The projections are also based on laws already passed by Congress to extend relief to households, businesses and local governments — but do not account for any future stimulus measures. Lawmakers are currently debating how or whether to extend government aid this summer, including to industries hardest-hit by stay-at-home measures.The latest projections showed that real gross domestic product is expected to grow at a 12.

The 10-year economic forecast is being released now, ahead of the CBO’s budget projections later this summer, so Congress can take into account “a rapidly evolving environment,” according to the report.the CBO estimated that real GDP would contract by 11 percent in the second quarter of this year, equivalent to a 38 percent drop at an annual rate. The May report also projected that in the second quarter, almost 26 million fewer Americans would be employed than in the fourth quarter of 2019.

But many economists and lawmakers caution that the jobs data reflects a survey taken in the middle of June — before a surge in cases pushed multiple states to reimpose restrictions and scale back reopening plans. That means scores of Americans have now been kicked out of the workforce for aOn Wednesday, the country reported

 

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