REUTERS / Rick Wilking
- Morgan Stanley's US economist Ellen Zentner expects the unemployment benefits released on Thursday to be 3.4 million. She told CNBC during an interview on Tuesday.
- Unemployment claims increased last week as layoffs caused by corona viruses began due to the slowdown in US economic activity.
- Other companies like Goldman Sachs also expect a massive increase in weekly unemployment claims.
- Read more about Business Insider.
Economists predict historic job losses in the US job market as the coronavirus pandemic continues to rage.
Morgan Stanley's US economist Ellen Zentner expects the unemployment benefits released on Thursday to be 3.4 million. She told CNBC during an interview on Tuesday. The Ministry of Labor report from Thursday shows unemployment benefits for a week ending March 21.
The loss of more than 3 million jobs in a week is "incredible," Zentner told CNBC. "It's a stop to economic activity."
Other economists have forecast a massive rise in unemployment claims after data rose last week by 70,000 to a total of 281,000. Goldman Sachs expects that The number of unemployment benefits will rise to a peak of 2.25 million As coronavirus-induced layoffs occur, Pantheon Economics predicts losses in the range of 2 to 3 million.
All of these forecasts would be an astonishing rise in unemployment claims and would far exceed the current record of almost 700,000 in 1982.
A US recession is generally seen as inevitable at this point in time as the coronavirus pandemic continues to have economic consequences. Morgan Stanley predicts that US gross domestic product will decrease by up to 30.1% in the second quarter of the year after activity declined sharply in March.
This extreme slump could push the unemployment rate down from the current historic lows to an average of 12.8%, which, according to the bank, is one of the highest levels seen since the 1940s.
However, Morgan Stanley believes the US economy may recover as businesses and consumers return to normal after the corona virus outbreak.
"We are now focusing on what the form of growth will be on the other side as social distancing measures wane," said Zentner.
(tagsToTranslate) Morgan Stanely (t) US Recession (t) Coronavirus (t) Coronavirus Pandemic (t) Weekly Unemployment Claims (t) US Labor Market (t) Markets and Economy