United States economists at the Federal Reserve Bank of St. Louis warned Tuesday that if the current rate of U.S. job losses continues the country's unemployment rate could reach 32.1 percent, the highest in nearly a century.
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The projections are even worse than St. Louis Fed President James Bullard's much-publicized estimate of 30 percent [unemployment]," CNBC reported. "They reflect the high nature of at-risk jobs that ultimately could be lost,” meaning about 47 million jobs.
To obtain the estimate, the experts averaged two figures: 66.8 million people that are estimated to be employed in occupations that are at high risk of layoff and 27.3 million workers that have occupations with a high contact intensity, which include barbers, hairstylists, food and beverage serving workers, among others.
“Summing to the initial number of unemployed in February, this resulted in a total number of unemployed persons of 52.81 million. Given the assumption of a constant labor force, this resulted in an unemployment rate of 32.1 percent,” the author of the analysis Miguel Faria-e-Castro, an economist with the St. Louis Fed said.
As CNBC noted, that number would be "more than three times worse than the peak of the Great Recession," which in 1929 peaked at 25 percent unemployment.
Last week more U.S. workers filed unemployment claims last week than during any other week in the nation's history, according to the findings released Tuesday from the Economic Policy Institute (EPI).
According to the report, this alone would raise the unemployment rate by more than half to 5.5 percent, moving back to 2015 levels in just one week. In comparison, the largest monthly rise in the unemployment rate in U.S. history was around 1.3 percentage points in October 1949; this week it would be 2.2.
The coronavirus-induced downturn has sparked mass layoffs across the nation as the country has become the epicenter of the pandemic without reaching its peak cases yet. As of Tuesday there more than 188,000 cases and over 3,800 deaths.