Sales of homes and cars will also keep
declining. And economists have forecast that
Thursday’s weekly report on applications for
unemployment benefits will show that millions
of Americans sought jobless aid last week, on
top of the record-high of nearly 17 million who
filed in the previous three weeks.
Economists now project a record-shattering 40%
annual decline in U.S. economic output for the
April-June quarter. While growth is expected
to rebound in the second half of the year,
economists at JPMorgan Chase have forecast
that the U.S. economy will still shrink 7% for
2020 as a whole.
The slowdown will be global. The International
Monetary Fund on Tuesday predicted that the
world economy would shrink 3% this year, the
worst outcome since the Great Depression.
That is hammering oil prices, threatening the
solvency of many oil drillers and putting many
of their employees out of work. Global demand
for oil will fall this year by the most ever due
to economic lockdowns around the world, the
International Energy Agency said Wednesday.
Demand will drop an estimated 9.3 million
barrels a day, which is equivalent to a decade’s
worth of growth.
In the U.S., consumer spending drives more than
two-thirds of the economy and was one of the
main pillars of support before the virus. Business
investment in new plants and equipment had
already pulled back in the face of the U.S.-China
trade war and falling oil prices.
On Wednesday, the government said U.S.
retail sales plummeted 8.7% in March, an
unprecedented decline, as the outbreak brought
most commerce to a halt.