Coronavirus Recession: America Is Preparing For Long-Term Economic Pain Inflation-adjusted gross domestic product (real GDP) is expected to decline by about 12 percent during the second quarter, equivalent to a decline at an annual rate of 40 percent for that quarter. by Matt Weidinger

The nonpartisan Congressional Budget Office (CBO) today released “Current Projections of Output, Employment, and Interest Rates and a Preliminary Look at Federal Deficits for 2020 and 2021.” The CBO projects the US unemployment rate will peak at 16 percent in the third quarter of 2020, and still average above 10 percent in 2021. The prospect of double-digit unemployment rates over the next year or longer will disappoint those hoping for a rapid recovery. 

Other key selections from this CBO report are copied below.

In the second quarter of 2020, the economy will experience a sharp contraction, and CBO’s current economic projections include the following:

• Inflation-adjusted gross domestic product (real GDP) is expected to decline by about 12 percent during the second quarter, equivalent to a decline at an annual rate of 40 percent for that quarter.
• The unemployment rate is expected to average close to 14 percent during the second quarter.

For fiscal year 2020, CBO’s early look at the fiscal outlook shows the following:

• The federal budget deficit is projected to be $3.7 trillion.
• Federal debt held by the public is projected to be 101 percent of GDP by the end of the fiscal year.

Learn more: Should Congress ‘make whole’ state unemployment trust funds depleted by shutdowns? | Short-time compensation offers promising help for the unemployed, but recent emergency legislation requires repair | Unemployment claims continue to surge.