The rapid spread of the coronavirus pandemic in the United States has impacted the workforce in the country with Americans already starting to lose their jobs. Economists are now predicting that the situation is set to get worse in the coming weeks and months and very quickly.
Last week, more than 281,000 Americans filed for their first week of unemployment benefits, according to a government report that was published on Thursday. That marked a 33 per cent spike in the number compared to the earlier week and was also noted to be the biggest percentage growth in the number since 1992.
But according to Goldman Sachs economists, the numbers that are expected in next week’s government report will likely be far worse. According to the economists, it is most likely that the data next week will reveal that about 2.25 million Americans filed for their first week of unemployment benefits for the week. That would be an eight fold increase in the number of people who filed compared to the number two weeks ago which will also be the highest on record.
The estimate made by the economists was based on the news reports about an unprecedented number of American workers losing their jobs early in the week. With millions of Americans choosing to or being forced by the authorities to stay back home in order to halt the spread of the virus, there has been a sudden drop in revenues in companies and firms in the airlines, restaurants, hotels, sports events and retailing industries and these companies are struggling to manage the situation.
There has also been a sudden jump in the number of called being made to the state employment agencies with people inquiring about unemployment benefits. Between just Monday and Wednesday, there were 76,000 calls received by Florida’s Department of Economic Opportunity. In comparison, it had received just 28,000 calls during the entire week before. According to the agency, it is now planning to hire an additional 100 people throughout the state to help it to receive and answer all the calls and and process unemployment claims.
159,000 calls, all before noon, were received by New York State’s Department of Labor on Thursday compared to the average of about 10,000 calls a day that is typically received by the agency.
According to the economists from the Goldman Sachs, even though there is a possibility that the unemployment claims will get reduced later during the week, it was estimated that more than 1 million people filed initial jobless claims during the current week even under conservative assumptions. That number was more than the current highest number of unemployment claims that was at 695,000 made during the the week ending October 2, 1982.
(Adapted from CNN.com)