The Congressional Budget Office said May 19 that the U.S. labor market will likely see the sharpest deterioration since 1930 in the second quarter of this year, and that economic recovery in the U.S. will continue through 2021.
Six things to know from CBO's report:
1. Gross domestic product in the U.S. is expected to contract 11 percent in the second quarter of this year, an annual rate of decline of 38 percent.
2. Some of the larger contributors to the drags on growth are business fixed investments and retail investments, expected this year to decrease 15.8 percent and 13.8 percent, respectively.
3. In the second quarter, the U.S. labor market should expect the "steepest deterioration since the 1930s."
4. At the end of 2019, the unemployment rate in the U.S. was less than 4 percent, but it's expected to average 15 percent in the second quarter of 2020. This equates to 26 million more unemployed Americans than there were at the end of 2019.
5. With the federal aid approved so far, the U.S. deficit will increase by $2.1 trillion in fiscal 2020, and $600 billion in 2021.
6. The economy is expected to start its road to recovery in the second half of 2020, as stay-at-home orders and bans on public gatherings are lifted , but the improvements won't be large enough to make up for earlier losses. As a result, the recovery may take the rest of next year.
Access the full report here.