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." (Read more coronavirus stories.)