In a note on Thursday, economists with Bank of America (BAC 1.35%) said that a recession has already hit. "We believe that the U.S. economy has fallen into recession, joining the rest of the world, and it is a deep plunge," wrote Michelle Meyer, along with other economists, in a note.

We're already there

The group is predicting a 12% decrease in gross domestic product in the second quarter of the fiscal year after a 0.5% rise in the first quarter. It's expecting a 0.8% overall pullback for the full fiscal year.

Father and son saving pennies.

Image source: Getty Images.

They said that jobs will be lost at the rate of 1 million per month for the duration of the coronavirus (COVID-19) shock, for a total of 3.5 million. This doubles the current unemployment rate to 6.3% as the U.S. joins other countries in an economic plunge. Hourly workers in the leisure, travel, and retail industries will be hardest hit, since they have the fewest opportunities to work from home, as millions of other Americans have been doing.

They expect the situation to begin turning around in April and back to normal rates by July for the second half of the year.

Easing the recovery

Meyer stressed that the key to a faster and smoother economic recovery is effective government action, which needs to be both quick and generous.

While the Federal Reserve has cut interest rates to zero and implemented other crisis measures, the White House needs to come through with an aggressive response to keep the damage minimal. Meyer optimistically added that "Although the decline is severe, we believe it will be fairly short lived."

Other major U.S. banks such as Morgan Stanley and Goldman Sachs have also declared this week that a recession is under way.