Coronavirus Business Impact: 5 Million US Jobs In Jeopardy, Economic Output Could Plummet By $1.5 Trillion

The ongoing coronavirus outbreak could cost the U.S. up to 5 million jobs, with economic output plummeting as much as $1.5 trillion, the Wall Street Journal reported Saturday.

A survey of 34 economists by the Journal revealed that a recession is on the horizon, with median forecasts ranging from 4.5% to 6.3% unemployment in the second quarter of the year and 4.5% to 7% in the third quarter. Median predictions for GDP growth are between -10% and -4% in the second quarter and -3.8% to 1.7% in the third quarter.

“This shock is very big,” Bruce Kasman, head of economic research at JP Morgan told the Journal. “You are going to see in the next two months the consequences of the actions taken in terms of economic activity. That set of trade-offs is not really clear in policy makers’ minds right now.”

In order to stem the spread of the virus, five states have shut down all non-essential business activity: California, New York, Illinois, New Jersey and Connecticut. These five states account for 31% of U.S. economic activity, with California alone making up 14.5% of the nation’s output.

Treasury Secretary Steven Mnuchin has warned that unemployment could skyrocket to 20% if Washington fails to act. National Economic Council Director Larry Kudlow has said that Congress and the White House are negotiating a $2 trillion stimulus package to shore up the economy.

The Trump administration, along with a group of bipartisan lawmakers, have pushed for direct payments to Americans as a way to help workers affected by the crisis. It’s still unclear how much these payments could be.

There are at least 24,148 cases of coronavirus in the U.S., with the death toll at 285. The longer the outbreak continues, the deeper the impact it will have on the economy.