Economists at Goldman Sachs downgraded their labor market forecast “to assume that more workers will lose their jobs and a larger share of them will be classified as unemployed,” the Wall Street bank wrote in a report to clients.

Goldman Sachs previously projected the unemployment rate would peak at 15%. The new forecasts are based on government statistics, the first glimpse of the reopening process and new big data sources, the bank said.

The federal government’s monthly unemployment statistics only go back to 1948. The current level of unemployment is the highest monthly rate on record.

Annual data, which go back to 1929, show that the unemployment rate peaked during the Great Depression at an average of 24.9% in 1933.

The so-called real jobless rate, which captures the percentage of Americans who want a job but have given up trying to find one, surged to 22.8% in April. That was up from just 8.7% the month before.

Goldman Sachs warned Wednesday that the real jobless rate will peak at 35%, up from the bank’s previous projection for a peak of 29%.

That would be worse than what the White House has publicly been bracing for. Kevin Hassett, senior economic adviser to President Donald Trump, told CNN last week that the real jobless rate could hit 25% before “hopefully” falling following a transition period this summer.

No matter where the unemployment peaks, economists have cautioned that it will take years, perhaps even more than a decade, to get the jobless rate back near pre-crisis levels.

The dire forecasts come as some states have begun to reopen their economies, a challenging task given the risk of giving new life to the pandemic.

Dr. Anthony Fauci, the nation’s top infectious disease expert, said Tuesday that the “consequences could be really serious” if states reopen ahead of the guidelines issued by the White House.

Goldman Sachs said the reopening process presents risks in both positive and negative directions.

For instance, China’s reopening suggests that a “much quicker pace of recovery is possible.”

Goldman Sachs upgraded its forecast for third-quarter GDP, predicting an annualized growth rate of 29%, compared with 19% previously.

“On the downside, prolonged weakness could cause severe scarring effects such as permanent layoffs and business closures that delay the recovery,” Goldman Sachs economists wrote.

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