NEW YORK, March 28 (Reuters) – JPMorgan Chase & Co further lowered its tracking estimate on U.S. economic growth for the first and second quarters this week, as more states issued stay-at-home orders to contain the spread of the coronavirus.
The investment bank now expects real U.S. gross domestic product (GDP) to be -10% in the first quarter and -25% in the second quarter, Michael Feroli, chief U.S. economist at JPMorgan, said in a report to investors on Wednesday.
Earlier this month, Feroli had estimated GDP would be -4% in the first quarter and -14% in the second quarter.
“The economic effects are broadening from activities that lack social distance — travel, theaters, etc — to those that lack social distance in production — a much vaster swath of the economy,” Feroli wrote.
The report predicts U.S. unemployment will reach 8.5%, more than double the current rate.
Feroli said he continues to expect the negative impacts of the coronavirus outbreak to lessen in the second half of the year, and forecasts GDP to grow 6% in the second half of the year. (Reporting by Elizabeth Dilts Marshall Editing by Paul Simao)