When physical risks and transition risks associated with climate change materialize, they can have a substantial impact on the real economy through the disruption of business, a decline in asset values, and a rise in energy prices. These adverse effects on the real economy will impact the financial system through a decline in the value of assets and an increase in credit costs.
In all, payroll employment has now expanded by about 6 million jobs since its low point, and the unemployment rate has fallen 2–1/2 percentage points since its peak.