US Job Loss At 14.7%, Highest Ever Since Great Depression

The extent of the economic hit of the coronavirus pandemic in the United States became clearer after reports of the unemployment rate in the country rising to 14.7 per cent. In April alone, 20.5 million jobs were lost in country.

This number is now the highest ever for the US except for during the Great Depression of the 1930s.

The worst rate of economic growth in a decade was reported from the US since the outbreak of the pandemic while also reporting the worst in record for its retail sales.

In February – when the economy had not been extensively hit by Covid-19, the disease caused by the novel coronavirus, the unemployment rate was at a 50 year low in the US at just 3.5 per cent.

“It is historically unprecedented,” said economist Erica Groshen, former head of the government’s Bureau of Labor Statistics, who now teaches at Cornell University. “We have put our economy into a medically induced coma in order to heal it from the pandemic… and that has led to the most precipitous loss of jobs seen in any of the modern data.”

Declines in every sector of the economy were reflected in the latest employment report from the US Labor Department.

The hardest hit sectors were the leisure and hospitality industries with a loss of jobs 47 per cent or 7.7 million. The loss of jobs in the education and health services was at 2.5 million while hat in the retail industry was at 2.1 million.

In their filing for unemployment benefits with the government, more than  three-quarters of those without jobs gad pointed out their current situation as being temporarily laid off, said the Labor Department, which meant that these workers were hoping of employment in the near future with a rebound in the US economy.

However, economists have predicted trends for some major changes in businesses such as putting a limit on the number of people who can sit inside a restaurant at one time. Such trends and restrictions could also reduce the need for workers compared to the pre pandemic levels.  They have also warned of the likelihood of businesses not surviving with a prolonged lockdown and shutdown of businesses.

“Even a temporary layoff can turn into a permanent one if the business doesn’t survive or if the business has to change its business model so dramatically that it needs different numbers or a different kind of worker,” Groshen said.

The situation in the US and the economic crisis because of the pandemic is not unique for America. In the United Kingdom, warnings of the sharpest recession on record was issued by the Bank of England while unemployment levels reaching 13 per cent in April was reported by Canada.

The huge job loss was essentially shrugged off by the US President Donald Trump in a television interview and said that the 20.5 million job losses was “totally expected” and “no surprise”.

“Even the Democrats aren’t blaming me for that. What I can do is I can bring it back,” he said as the figures were released.

(Adapted from BBC.com)



Categories: Economy & Finance, HR & Organization, Regulations & Legal, Strategy, Sustainability, Uncategorized

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