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.

This is the world we live in. This is the world we cover.

Because of people like you, another world is possible. There are many battles to be won, but we will battle them together—all of us. Common Dreams is not your normal news site. We don't survive on clicks. We don't want advertising dollars. We want the world to be a better place. But we can't do it alone. It doesn't work that way. We need you. If you can help today—because every gift of every size matters—please do. Without Your Support We Simply Don't Exist.

'Stop Line 5': Valve Turner Forces Shutdown of Enbridge Oil Pipeline in Michigan

"We are here to protect the water, land, and air that support all life, including our own. Line 5 poses an immediate threat to our lives and these actions are taken out of necessity and in self-defense."

Jessica Corbett ·


'Delay Is the New Denial': Study Confirms 99.9% of Scientists Agree on Climate

"It's pretty much case closed for any meaningful public conversation about the reality of human-caused climate change."

Brett Wilkins ·


Exposed: How Pfizer Exploits Secretive Vaccine Contracts to Strong-Arm Governments

"Pfizer has used its monopoly on a lifesaving vaccine to extract concessions from desperate governments," said the report's author, urging action from the Biden administration.

Jessica Corbett ·


'A Toxic Presence in the Party': Ocasio-Cortez Joins Calls for Jay Jacobs to Resign

"India Walton is the Democratic nominee for mayor of Buffalo. No amount of racist misogyny from the old boys' club is going to change that."

Brett Wilkins ·


New Multimedia Report Details Unprecedented 'Permian Climate Bomb' in Texas

"If the Biden Administration wants to be serious about its promise to demonstrate U.S. climate leadership, it must first clean up its own backyard."

Kenny Stancil ·

Support our work.

We are independent, non-profit, advertising-free and 100% reader supported.

Subscribe to our newsletter.

Quality journalism. Progressive values.
Direct to your inbox.

Subscribe to our Newsletter.


Common Dreams, Inc. Founded 1997. Registered 501(c3) Non-Profit | Privacy Policy
Common Dreams Logo