Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

Unemployed men marching along the Thames embankment in 1930, carrying a banner reading "Organise or Starve." (Photo by Topical Press Agency/Getty Images)

Fed Economists Warn US Unemployment Rate Could Soon Reach 32%—During Great Depression It Peaked at 25%

"These are very large numbers by historical standards, but this is a rather unique shock that is unlike any other experienced by the U.S. economy in the last 100 years."

Jake Johnson

Economists at the Federal Reserve Bank of St. Louis are warning that if the current rate of U.S. job losses continues, the country's unemployment rate could reach a staggering 32.1% by the end of June as the coronavirus pandemic-induced downturn sparks mass layoffs across the nation.

Miguel Faria-e-Castro, an economist with the St. Louis Fed, wrote in an analysis last week that 47 million more workers could lose their jobs by the end of the second quarter of 2020, bringing the total number of unemployed people in the U.S. to 52.8 million. As CNBC noted, that number would be "more than three times worse than the peak of the Great Recession."

Faria-e-Castro's projection of 32.1% unemployment would put the U.S. jobless rate significantly higher than the Depression-era peak of 24.9%.

"The projections are even worse than St. Louis Fed President James Bullard's much-publicized estimate of 30% [unemployment]," CNBC reported. "They reflect the high nature of at-risk jobs that ultimately could be lost."

Faria-e-Castro stressed that "the expected duration of unemployment" could matter more "than the unemployment rate itself, especially if the recovery is quick (and so duration is short)."

"These are very large numbers by historical standards," Faria-e-Castro wrote, "but this is a rather unique shock that is unlike any other experienced by the U.S. economy in the last 100 years."

In response to the St. Louis Fed analysis, HuffPost senior reporter Zach Carter tweeted, "It remains simply incredible that Congress is not even in town during a crisis of this magnitude."

"An astonishing, bipartisan failure of government," Carter added.

As Common Dreams reported last Friday, 3.3 million people filed jobless claims two weeks ago, shattering the previous record of 695,000 set in 1982.

"I have been a labor economist for a very long time and I have never seen anything like this," Heidi Shierholz of the Economic Policy Institute wrote in a blog post last week. "Furthermore, this is just the tip of the iceberg."

More than 40 economists surveyed by Bloomberg on Monday said they believe new Labor Department unemployment numbers set for release Thursday will be even higher.

Thomas Costerg, an economist at the investment firm Pictet Wealth Management, predicted that new jobless claims could be as high as 6.5 million while Goldman Sachs estimated 5.25 million.

New York magazine's Eric Levitz wrote Monday that while the "St. Louis Fed's projection is just a rough estimate... there's reason to think its catastrophic prediction is in the right ballpark."

"It's hard not to suspect that most every part of our economic life is going to get worse before it gets better," Levitz added.


Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.

We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.

House Democrats Request 'Damage Assessment' Following Recovery of Classified Docs

"Former President Trump's conduct has potentially put our national security at grave risk," Reps. Carolyn Maloney and Adam Schiff wrote to Director of National Intelligence Avril Haines.

Kenny Stancil ·


Violent Threats Against FBI Soar as Trump Lies About Mar-a-Lago Search

Menacing messages posted online "include a threat to place a so-called dirty bomb in front of FBI Headquarters" and "general calls for 'civil war' and 'armed rebellion,'" officials warned.

Kenny Stancil ·


'Biggest Win for Tax Fairness' in Decades: Progressives Cheer Reforms in IRA, Demand More

"While this bill establishes desperately needed changes to our tax laws and IRS funding, it is still a far cry from the systemic changes that we need in our society to rectify the hold the rich still have on every level of our economy."

Kenny Stancil ·


'Care Can't Wait': IRA a Good Start, Progressives Say, But More Is Needed

"Americans deserve a full loaf of bread," said health justice advocate Ady Barkan.

Kenny Stancil ·


'I'm Back': Fetterman Returns to Campaign Trail Following May Stroke

"I'm not only grateful to be alive, but also for the campaign we're building together," said the Democratic nominee for Pennsylvania's open U.S. Senate seat.

Kenny Stancil ·

Common Dreams Logo