(PatrioticPost.Com)- Goldman Sachs has a rather dismal outlook for the United States economy.
On Monday, it released its updated outlook for the U.S. economy from April through June, which included an annual rate of contraction of 34% compared to the first quarter of the year. Its initial estimate was 24%, which was a huge number in its own right.
Now, with things looking even grimmer due to the continued lockdown of the country because of the coronavirus, Goldman Sachs expects things to be even worse than original.
A major reason for the downgrade is that the firm forecasts that the unemployment rate will rise to 15% by the middle of this year, compared to what it believed would be 9% before.
As for a rebound in the economy, Goldman Sachs said it should happen sometime between July and September. And while it feels like the rebound will be strong when it does happen, things won’t be so easy going in the interim.
In another startling forecast Deutsche Bank predicted GDPs in Europe and the United States will take a collective $2 trillion hit because of the coronavirus pandemic. That prediction takes into account countries passing policy to offset the financial collapse, including America’s recently passed massive economic stimulus package.
The airline industry has been particularly hard hit by the spread of the coronavirus, as the demand for travel both domestically and international is at close to zero. But that isn’t the only industry taking a pounding.
With many states issuing state-at-home orders — and many residents in other states doing their best to follow social distancing guidelines — brick-and-mortar retail stores are seeing significantly less foot traffic than they were just four weeks ago. That has prompted major retail chains to either lay off or furlough workers to curb financial losses.
On Monday, March’s — which also owns Bloomingdale’s and Bluemercury — announced that it would furlough almost all of the 1250,000 employees it has in the retail store division of its company. The company said it has lost the “majority” of its sales because of the coronavirus, and it shut down all 775 of its stores earlier in March.
The company did say that these furloughed employees would receive health benefits from the company through at least the month of May.
Gap is another company that announced recently it would furlough most employees who work in their retail stores, and they would also reduce the number of workers in its corporate offices.
In a statement, CEO Sonia Syngal said:
“After taking the extraordinary measures of temporarily closing all of our company-owned stores in North America and Europe two weeks ago, we are now in a position where we must take deeper actions.”
Investors have obviously soured on retail chains such as Macy’s, but even Monday’s furlough of workers to curb costs didn’t quell their fears. Shares of the company dropped another 2.9% on Monday. Year to date, Macy’s stock is down almost 70%.