Potential Jobs Impacted by Covid-19: An Update

This blog post updates our earlier analysis of the potential jobs impacted by Covid-19. The update reflects three adjustments to the original analysis. First, we updated our guesses on the shares of each industry employed and working at still-operating businesses based on the Labor Department’s March Employment Situation report. Second, we use an updated model to estimate the possible June unemployment rates from initial unemployment insurance claims data (the model details are found here. Finally, we use unemployment rate predictions that incorporate the data from the April 2 report on unemployment insurance claims.

Table 1 reports our updated estimates. Our baseline estimate is now that 17 million jobs will be impacted through April. If all those jobs are lost, the unemployment rate would rise to 14.4% in June.

With regard to alternatives, using the telecommute shares from Dingel and Neiman (2020) instead of ours results in somewhat less damage. Our “low” projection reduces those at work by 10 percentage points relative to the baseline, subject to the 20% of February employment floor for non-essential industries. The high projection assumes 10 percentage points more individuals are at work than what is guessed in the baseline, subject to a cap at 100%. These scenarios result in nine to 29 million jobs impacted and, if all are lost, a June unemployment rate between 12% and 18%.

1. Jobs impacted and potential June unemployment rate

The views expressed in this post are our own and do not reflect those of the Federal Reserve Bank of Chicago or the Federal Reserve System.