The effect of the novel coronavirus and the public health measures enacted to slow its spread—particularly “social distancing”—have been profound for economic activity in the United States. We have already seen some of the leading edge of this effect in recent data releases. This post highlights some recent forecasts of the effects of the coronavirus shock on measures of economic activity, and what these contractions in economic activity mean for jobs. Its key findings are:

• Forecasts of the size of the drag on growth imposed by the coronavirus (and associated public health measures) have risen rapidly in recent weeks.
• Currently, forecasts indicate that gross domestic product (GDP) will be roughly 12.8% smaller by the end of June 2020 due to coronavirus effects—an extraordinarily fast economic collapse.
• To return to pre-shock economic health by the middle of 2021, at least $1.4 trillion in additional recovery spending would be needed—with $2 trillion being a more prudent target.
• A contraction this rapid would be consistent with job loss of roughly 19.8 million by the end of June 2020.
• This estimate of 19.8 million jobs lost could be too high or too low, for a number of reasons. For example, employers could reduce hours instead of laying off workers, and policies to keep workers on the payroll may be effective, keeping job losses down. Or coronavirus effects may be concentrated in relatively labor-intensive industries, so employment might actually fall faster than GDP. A plausible range is between 18 and 28 million jobs lost.