Advertisement

Report: Pandemic's U.S. economic hit could last 11 years, cost $8 trillion

By Jean Lotus

June 1 (UPI) -- The coronavirus pandemic will affect the economic health of the United States for the next decade, with a $7.9 trillion hit on the country's gross domestic product over the next 11 years, a federal agency said Monday.

The Congressional Budget Office revised its economic forecast from January to calculate that the U.S. economy would contract by 3 percent by 2030 due to the economic downturn from the pandemic.

Advertisement

"Business closures and social distancing measures are expected to curtail consumer spending, while the recent drop in energy prices is projected to severely reduce U.S. investment in the energy sector," Phillip Swagel, budget office director, wrote in a report to Senate Democratic Leader Chuck Schumer, D-N.Y.

Swagel said pandemic relief legislation, like the $2.2 trillion CARES Act, has blunted the economic effects of the pandemic. Congress has put forward another relief bill that could run up to $3 trillion.

RELATED U.S. manufacturing reports show slight hope in long recovery ahead

"Recent legislation will, in CBO's assessment, partially mitigate the deterioration in economic conditions," Swagel wrote.

The future economic picture is filled with uncertainty, Swagel said. The CBO will release future economic forecasts, but has to contend with "extreme changes [that have] disrupted standard estimation methods and data sources," he wrote.

Advertisement

Meanwhile, economists agreed that the economic impact of the pandemic could stretch well into the future. More than 40 million Americans have filed for unemployment since March. A Gallup poll released Friday said seven out of 10 Americans believe the United States' economy is in a recession or depression.

RELATED Poll: Most Americans say economy is in a recession or depression

"Slower growth means higher unemployment, lower wages and less income for people," Adam Ozimek, chief economist at Upwork, told the Washington Post. "What we are looking at is another decade of that."

Schumer urged the Senate to move forward on passing more economic relief, including an extension of coronavirus-related unemployment benefits, which end in July.

"In order to avoid the risk of another Great Depression, the Senate must act with a fierce sense of urgency to make sure that everyone in America has the income they need to feed their families and put a roof over their heads," Schumer said in a statement.

RELATED Another 2.1M in U.S. file for unemployment; 10-week total over 40M

"The American people cannot afford to wait another month for the Senate to pass legislation. They need our help now."

Latest Headlines

Advertisement
Advertisement

Follow Us

Advertisement