Unemployment will increase 5-7% in the US, not 20-30%: UNC Kenan-Flagler expert

CHAPEL HILL – The coronavirus crisis will trigger a jump in unemployment, but not as high as some might have fear.

“I’ve seen some numbers – like 20 to 30 percent. Those just seem too high,” said Kenan Institute Executive Director Professor Greg Brown in a press briefing call via teleconference on Tuesday. “These are sensational numbers that people are grabbing.”

Instead, he predicts it will be significantly lower.

“A bit more realistic is that we will see an increase of more like five to seven percent, assuming we can get a proper stimulus package and that looks like it’s going to happen.”

A picture of the economic devastation in North America and Europe has already started to emerge. A US government report published last Thursday showed that 281,000 Americans filed for their first week of unemployment benefits last week — a sudden 33 percent jump over the week before and the largest percentage increase since 1992.

The U.S. Department of Labor is expected to release unemployment data for March next week.

However, Brown said it could take even longer to see the full impact of coronavirus on the labor market for some time.

“We’re starting to see some mass layoffs and increases in jobless claims. We’re really expecting the big spike to happen in April,” said Brown.

He remained optimistic.

“It’s realistic to think that what is being done right now will limit these really extreme cases of unemployment.”