- The global economic hit from the coronavirus crisis will be far worse in the near term than the financial crisis, according to Goldman Sachs.
- In the U.S., second-quarter activity likely dropped 35% while unemployment could hit 15%.
- However, the recovery in the second half of the year could be stronger than anything the U.S. has seen.
The global economic hit from the coronavirus crisis will likely be four times worse than the financial crisis and the U.S. will see its highest unemployment rate since World War II, according to a Goldman Sachs forecast.
With most of the world’s developing economies on a near total shutdown to try to stop the coronavirus spread, Goldman sees a second-quarter GDP decline of 11% from a year ago and 35% from the previous quarter on an annualized basis.
In the U.S., the headline unemployment rate should hit 15% “and even this understates the severity of the situation” as many workers will be sidelined and not looking for jobs amid an anticipated reopening of the economy. That will accompany a GDP decline in the U.S. of 11% from a year ago and 34% on a quarterly basis, both numbers also considerably worse than anything seen during the financial crisis in 2008.