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US economy to shrink at fastest rate since 1946, unemployment to top 15%: Morgan Stanley

The Economic Times

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    The U.S. bank said it had cut its first-quarter forecast to an annualised 3.4% contraction from a previous 2.4%, while in the second quarter the economy is predicted to shrink 38%, up from an earlier forecast of a 30% contraction.

    Reuters|

    Last Updated: Apr 03, 2020, 12.25 PM IST

    Reuters

    US-reuters

    The United States economy will shrink 5.5% in 2020, the steepest drop since 1946, with a huge 38% contraction predicted for the second quarter,

    Morgan Stanley

    said on Friday in a new batch of forecasts on the economic damage from the

    coronavirus

    outbreak.

    The U.S. bank said it had cut its first-quarter forecast to an annualised 3.4% contraction from a previous 2.4%, while in the second quarter the economy is predicted to shrink 38%, up from an earlier forecast of a 30% contraction.

    U.S. unemployment will also peak at a record 15.7% in the second quarter – that is up from a previous 12.8% forecast by the bank’s economists – with cumulative job losses of 21 million in the second quarter, Morgan Stanley said.

    Projections released by the U.S. Congressional Budget Office showed U.S. gross domestic product will decline by more than 7% in the second quarter as the health crisis intensifies.


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    Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service



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