The unemployment rate in the US may reach 20% by the end of April.
About 26 million people have applied for unemployment benefits in the five weeks since the outbreak of the coronavirus forced millions of companies to close. Since mid-March, one in six workers has lost their jobs, which is the worst indicator on record. Economists predict that the unemployment rate may reach 20% in April.
A huge number of job cuts plunged the US economy into the worst crisis since the great depression of the 1930s. Some economists say that the country’s output could fall by half compared to the level during the great recession, which ended in 2009.
Administrative measures taken to combat the epidemic sparked violent protests in several state capitals. Crowds of people demanded that the government resume the activities of enterprises. Some governors have begun easing restrictions, despite warnings from epidemiologists that it is too early to ease restrictions, otherwise, it could lead to an increase in infections. In Georgia, gyms, hairdressers, and bowling clubs can open as early as Friday. In Texas, they opened access for visitors to parks.
However, this selective ease will not lead to job growth, especially if Americans choose to sit scrap. Most of the country’s residents prefer to stay at home and agree that removing the social distance rule may not be safe. Besides, many small companies that failed to get loans under the Federal assistance program will lay off even more employees.
The total number of people receiving unemployment benefits has reached a record 16 million, surpassing the previous high of 12 million sets in 2010, just after the end of the 2008-2009 recession. This figure reflects only those people who were able to apply for unemployment benefits on time and whose applications were approved.
In some States, many laid-off workers face obstacles when trying to apply for benefits. Among them are millions of freelancers, contractors, workers, and self – employed people-these categories of workers are now eligible for unemployment benefits for the first time in history.
Sudden and large-scale layoffs occurred in almost all sectors of the economy. Federal Reserve economists estimate that hotels and restaurants have lost the most jobs – 4 million since February 15. This is almost a third of all people working in this industry. In the construction sector, 9% of the total number of employees lost their job
Economists are dreading the release of the Labor Department’s April report on the job market. JPMorgan economists forecast the loss of 25 million jobs. This is almost three times more than during the entire period of the great recession.
A Federal aid package worth more than $ 2 trillion signed by the President last month allowed millions of large companies, contractors and self-employed people to qualify for unemployment benefits. But most states have yet to approve applications for unemployment benefits – this requires urgently reprogramming specialized application sites that have collapsed from the sudden influx of visitors. As a result, many people who lose their jobs are not considered fired.