Goldman Sachs is predicting that a quarter of the U.S. workforce will be unemployed at the peak of the coronavirus pandemic.
The investment bank revised its forecast for second quarter gross domestic product (GDP), now predicting it will decline 39 percent instead of 34 percent. That revision increased its peak unemployment rate estimate to 25 percent from 15 percent after accounting for first quarter GDP and April employment data, among other factors.
The pandemic has led to record-high numbers of unemployment, with 20.5 million people reporting losing their jobs in April alone. The unprecedented losses meant the unemployment rate spiked from 4.4 percent in March to 14.7 percent at the end of April, the highest since the Great Depression.
By the end of 2020 Goldman Sachs is predicted a 6.5 percent decline in GDP. However, the bank predicts a relatively quick recovery period as businesses begin reopening, as many have across the country.
Much of that drop can be attributed to a decline in consumer activity, which bank analysts predicted fell by more than half in March and April as state and local governments imposed stay-at-home orders. Manufacturing output also fell 26 percent in April as auto production came nearly reached a halt.
The bank also noted that not all industry have been negatively impacted. The use of food delivery services has increased 40 percent and streaming services are seeing a similar surge in the past two weeks. Video chat app downloads have seen an increase of of 1,300 percent in the past two weeks after increasing by nearly 2,000 percent in April.