The number of Americans who filed for unemployment benefits hit a history high for the last week as more and more lose their jobs because of shutting down of business due to the conronavirus pandemic.
The latest figures broke the previous week’s historic record by quite a margin.
The United States Department of Labor said that jobless claims filed by Americans in the week ended 28 March were more than 6.6 million. Compared to the record week before, this was twice the number. It is also the highest for week since records of unemployment were being kept in the country.
The unemployment numbers clearly reflect the deep economic impact that the coronavirus pandemic has left on the US. More than 216,000 Americans have now been infected by the virus.
The White House was forced to announce retaining restrictions on activity in its efforts to try and prevent the outbreak with the total number of deaths in the country rising to more than 5,000.
The US could see “the deepest recession on record” while also forecasting the rate of unemployment in the country would be as high as more than 15 per cent, warned analysts at Bank of America. Such forecasts are in sharp contrast to the largest economy of the world’s recent streak of strong performance with unemployment rate staying at around 3.5 per cent.
However, in recent weeks, more and more businesses in the country have been forced to shut down as more than 80 per cent of Americans have been placed under some form of lockdown to prevent the spread of the virus pandemic.
Analysts are very worried not only because of the number and rate of unemployment but also at the speed at which businesses in the country have sacked employees.
In over just the last two weeks, about 10 million Americans have lost their jobs. In comparison, the number of people in the US who lost their jobs was 9 million during the 2008 financial crisis.
Analysts and economists have highlighted a number of factors behind the historic unemployment claim numbers for the past week.
According to economists, about a fifth of the US workforce is now in some form of lockdown as more states in the country order temporary closure of all non-essential businesses to prevent the spread of the virus.
The US government also expanded the relief package signed last week and now includes more unemployed people including self-employed and independent contractors.
Some economists fear that the actual number of unemployed in the country could be much higher because many of them have not yet been able file for unemployment claims.
“I don’t usually look at data releases and just start shaking,” said Heidi Shierholz, former chief economist at the US Department of Labor and now policy director at the Economic Policy Institute. “This is a portrait of disaster … It’s like nothing we’ve ever seen before. It represents just incredible amounts of grief and suffering.”
“With this report there should be little doubt that … US is already in deep recession and the global economy will be too”, tweeted Mohamed A El-Erian, chief economic adviser to financial services firm Allianz.
(Adapted from BBC.com)