Adjust the slider to model the cumulative economic impact of each percentage point increase in unemployment across all sectors identified in the report. Coefficients are derived from Federal Reserve research, CBO data, and Okun's Law.
Methodology: This model uses empirical coefficients from peer-reviewed research and government data. Key anchors include Okun's Law (2% GDP loss per 1pp unemployment), Federal Reserve mortgage delinquency research (0.65pp delinquency increase per 1pp unemployment), and BLS wage data ($65K avg wage × 1.68M workers per pp). All dollar values are in 2025 USD. The model represents order-of-magnitude estimates, not precise forecasts.
Unemployment Increase
percentage points above baseline
8.40M
workers displaced
Quick Scenarios
Annual GDP Contraction
$2.90T
10.0% of U.S. GDP ($29T)
Federal Deficit Increase
$204.5B
New total deficit: $2.10T (7.3% of GDP)
Total Wealth Destruction
$7.50T
Housing + financial market losses combined
Workers Displaced
8.40M
5pp × 1.68M workers per point
Annual economic damage per sector at +5pp unemployment increase
Expand each category to see the sub-components and their individual contributions.
Federal Budget Deficit
Combined revenue loss (income + payroll taxes) and new mandatory spending (UI, Medicaid, SNAP) per percentage point of unemployment.
$204.5B
at +5pp
GDP Contraction (Okun's Law)
Per Okun's Law, each 1pp rise in unemployment corresponds to approximately a 2% decline in GDP (~$580B on a $29T economy).
$2.90T
at +5pp
Housing Market Wealth Loss
Each 1pp unemployment increase causes approximately a 0.8% decline in home prices, destroying ~$376B in household wealth across the $47T residential real estate market.
$1.88T
at +5pp
Commercial Real Estate Value Loss
Each 1pp unemployment vacates ~100M sq ft of office space, reducing rental income by ~$3.5B and destroying ~$42B in CRE asset value (at a 12× income multiple).
$210.0B
at +5pp
Financial Market Wealth Loss
A 1pp unemployment spike historically correlates with a ~2.5% S&P 500 decline, destroying ~$1.125T in market capitalization and ~$450B in household retirement savings.
$5.63T
at +5pp
Social & Second-Order Costs
Includes public health costs (mental health, uninsured ER visits), crime costs, and state/local government revenue shortfalls per percentage point of unemployment.
$162.5B
at +5pp
Side-by-side comparison of all four displacement scenarios across every impact category.
| Impact Area | Mild Disruption+2pp | Moderate Displacement+5pp | Severe Displacement+10pp | Mass Displacement+15pp |
|---|---|---|---|---|
| Workers Displaced | 3.4M | 8.4M | 16.8M | 25.2M |
Budget Deficit | $81.8B | $204.5B | $409.0B | $613.5B |
GDP Loss | $1.16T | $2.90T | $5.80T | $8.70T |
Housing | $752.0B | $1.88T | $3.76T | $5.64T |
CRE | $84.0B | $210.0B | $420.0B | $630.0B |
Financial Markets | $2.25T | $5.63T | $11.25T | $16.88T |
Social Costs | $65.0B | $162.5B | $325.0B | $487.5B |
| Total Annual Impact | $4.39T | $10.98T | $21.96T | $32.95T |
* Note: GDP loss and financial market losses are not strictly additive — some overlap exists. Total row represents the sum of all modeled categories for comparison purposes.
Every single percentage point of unemployment increase carries the following baseline annual cost to the U.S. economy.
$40.9B
Budget Deficit
per 1pp unemployment increase
$580.0B
GDP Loss
per 1pp unemployment increase
$376.0B
Housing
per 1pp unemployment increase
$42.0B
CRE
per 1pp unemployment increase
$1.13T
Financial Markets
per 1pp unemployment increase
$32.5B
Social Costs
per 1pp unemployment increase
Model compiled by Manus AI · March 2026 · Based on BLS, CBO, Federal Reserve, and peer-reviewed economic research. Values represent order-of-magnitude estimates for policy planning purposes.