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Montevideo, July 13th 2020 - 06:25 UTC

 

 

COVID-19 wipes 20,5 million jobs in the US; unemployment soars to 14,7%

Saturday, May 9th 2020 - 08:50 UTC
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The unprecedented collapse drove the unemployment rate to 14.7%, well beyond the peak in late 2009 during the global financial crisis - and from 4.4% in March. The unprecedented collapse drove the unemployment rate to 14.7%, well beyond the peak in late 2009 during the global financial crisis - and from 4.4% in March.

The COVID-19 lockdown wiped out 20.5 million jobs in the United States in April, destroying nearly all the positions created in the prior decade in the world's largest economy, the Labor Department reported on Friday.

The unprecedented collapse drove the unemployment rate to 14.7% - well beyond the peak hit in late 2009 during the global financial crisis - and from 4.4% in March. The rate was 14,2% for white Americans but 16.7% among African Americans and 18.9% among Hispanic Americans.

On Thursday, the government said that 33.5 million workers had filed first-time claims for unemployment benefits during the past seven weeks.

This is the steepest plunge in payrolls since the Great Depression, also shattering the post-World War Two record of 10.8% in November 1982.

Job losses in March were worse than initially reported, falling 870,000 even though the business closures mostly happened in the second half of the month.

President Donald Trump on Friday downplayed the unprecedented job losses, saying they were not a surprise. “It's fully expected, there's no surprise. Somebody said, 'oh look at this,'” he said on Fox News minutes after the Labor Department published the figures.

The bleak numbers strengthen analysts' expectations of a slow recovery from the recession caused by the pandemic, adding to a pile of dismal data on consumer spending, business investment, trade, productivity and the housing market.

The monthly employment report underscored the devastation unleashed by lockdowns imposed by states and local governments in mid-March to slow the spread of COVID-19. COVID-19 has infected more than 1.25 million Americans and killed more than 75,000, the world's highest number of cases and deaths.

“Our economy is on life support now,” said Erica Groshen, a former commissioner of the Labor Department's Bureau of Labor Statistics.

“We will be testing the waters in the next few months to see if it can emerge safely from our policy-induced coma,” added Groshen, who is now a senior extension faculty member at the Cornell University School of Industrial and Labor Relations.

Though millions of Americans continue to file claims for unemployment benefits, April could mark the trough in job losses. Companies such as Walmart and Amazon are hiring workers to meet huge demand in online shopping. Truck drivers are also in demand, while supermarkets, pharmacies and courier companies need workers. Still, economists do not expected a quick rebound in the labour market.

Economists say the economy entered recession in late March, when nearly the whole country went into COVID-19 lockdowns.

Categories: Economy, Politics, United States.

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