The wave of layoffs that has engulfed the US economy since the coronavirus struck forced 5.2 million more people to seek unemployment benefits last week, the government has reported.
Roughly 22 million have now sought jobless benefits in the past month — easily the worst stretch of US job losses on record. It means that roughly one in seven workers have lost their jobs in that time.
The nation’s output could shrink by roughly 10.5 per cent before it starts to rebound, according to Ryan Sweet, an economist at Moody’s Analytics.
That would be more than double the contraction that occurred during the 2008-2009 recession, which was the worst downturn since the Great Depression of the 1930s.
All businesses deemed non-essential have been closed in nearly every state. Deep job losses have been inflicted across nearly every industry.
Some economists say the unemployment rate could reach as high as 20 per cent in April, which would be the highest rate since the Depression. By comparison, unemployment never topped 10 per cent during the Great Recession.
Layoffs are spreading well beyond service industries like hotels, restaurants, retail stores and entertainment, which have absorbed the brunt of the job cuts, into white collar professional occupations, including software programmers, legal assistants and sales people. Workers in other occupations, like construction, are also suffering.
Up to 50 million jobs are vulnerable to coronavirus-related layoffs, economists say — about one-third of all positions in the United States.
That figure is based on a calculation of jobs that are deemed non-essential by state and federal governments and that cannot be done from home.
It’s unlikely that all those workers will be laid off or file for unemployment benefits. But it suggests the extraordinary magnitude of unemployment that could result from the pandemic.
“This crisis combines the scale of a national economic downturn with the pace of a natural disaster,” said Daniel Zhao, senior economist at Glassdoor.
“And that’s really unprecedented in American economic history.”
All told, nearly 12 million people are now receiving unemployment checks, essentially matching the peak reached in January 2010, shortly after the Great Recession officially ended.
That figure is less than the number of applicants in part because it lags behind the number of first-time jobless claims figure by a week. And many people who apply for unemployment aid are turned down and don’t actually receive checks.
Other recent reports have contributed to the grim economic picture. Sales at stores and restaurants fell by the most on record in March, the government said Wednesday.
US industrial output fell by the most since 1946 and home building plunged 22 per cent in March from the previous month.
But now, job losses are not only deepening but also broadening, a trend that is sure to continue the longer the economic downturn lasts.
Some state unemployment agencies, swamped by applications, are still working through backlogs, suggesting that the claims figures will likely remain high in the coming weeks.
Connecticut’s labour department said this week that it had processed roughly half the nearly 350,000 applications for jobless benefits it had received in the past month. That’s usually the amount it typically receives in two years.
In most states, self-employed, freelance and gig workers aren’t yet able to file applications for unemployment aid under new rules enacted by the federal government’s USD$2.2 trillion (AUD$3.6t) economic relief package.
That legislation extended eligibility for aid to those categories of workers for the first time. But most states have to establish new systems to handle their jobless claims.
For breaking news alerts and livestreams straight to your smartphone sign up to the 9News app and set notifications to on at the App Store or Google Play.
You can also get up-to-date information from the Federal Government’s Coronavirus Australia app, available on theApp Store,Google Playandthe Government’s WhatsApp channel.
Privacy & Cookies Policy
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and are used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.