WASHINGTON | The gross domestic product of the United States is expected to decline by around 12 % in the second quarter compared with the first, and the unemployment rate is expected to climb to nearly 14 %, due to the impact of the pandemic coronavirus, according to estimates released Friday by an independent agency.
Year-on-year, the decline in GDP is expected to reach 39.6 per cent, specify the services to Congressional budget, CBO.
The unemployment rate could peak at 16 % in the third quarter, as many companies have had to suspend their activity in an effort by the authorities to stop the virus.
In the first quarter, the unemployment rate amounted to 3.8 %.
The federal budget deficit should reach this year 3700 billion dollars, whereas the Congress had voted a huge plan of economic aid. This is more than triple the previous estimate.
The debt should, she, representing 101 % of GDP at the end of the year.
“The economy will suffer a sharp contraction in the second quarter of 2020 due to factors related to the pandemic, including measures of social distancing put in place to contain it,” said the CBO in a statement.
It is expected that economic activity will resume in the third quarter as concerns about the pandemic are dwindling and that the States and local authorities to improve the flexibility of ” the ordinances of the home support, the banning of public gatherings, and other measures that restrict economic activity “.
The agency table and on a rebound by 5.4% in the third quarter compared to the second and an increase of 23.5% year-on-year. In the last quarter, it anticipates a growth of 2.5% on the previous quarter and 10.5 % year-on-year.
“However, the challenges of the economy and labour market are likely to persist for some time “, they argue.
The CBO will publish mid-may the details of his economic outlook for 2020 and 2021.
For the time being, year-on-year, it expects for this year a contraction in GDP of 5.6% and a rebound of 2.8 % in 2021.