JP Morgan slashes forecast for U.S. GDP, sees 14% second-quarter drop

(C) Reuters. JP Morgan slashes forecast for U.S. GDP, sees 14% second-quarter drop

SAN FRANCISCO (Reuters) – The U.S. economy could shrink 4% this quarter and 14% next quarter, and for the year is likely to shrink 1.5%, a JP Morgan economist said on Wednesday, in one of the most dire forecasts yet issued for the potential hit from the coronavirus epidemic.

U.S. chief economist Michael Feroli also forecast unemployment to rise to 6.25% by the middle of the year before easing to about 5.25% by year end as economic growth restarts. The forecast assumes the Fed will continue to find “creative” ways to support the economy and that the Trump administration and Congress deliver fiscal support of $1 trillion.