Just last week, the Organization for Economic Cooperation and Development (OECD) — a group of 36 countries — issued its forecast for the United States through 2021. It is unlikely to inspire much cheering. Acknowledging that much depends on the severity of the coronavirus, the OECD report constructs two scenarios: one that might be termed “pessimistic” and a second that is “more pessimistic.”
Under the “pessimistic” assumptions, the unemployment rate is projected at 11.3 percent at the end of 2020 and the economy (gross domestic product) falls 7.3 percent for the year. Both the unemployment rate and the GDP decline are larger than in any previous post-World War II recession. By way of comparison, the peak monthly jobless rate in the Great Recession of 2007-2009 was 10 percent. Continue reading.