US Unemployment Rate Spikes to 20 per cent; Double up 2008’s Great Recession
The economic impact of coronavirus took a steep turn on Thursday. More than 4 million Americans have applied for unemployment benefits. It brings the total of past 5 weeks to a whopping 26.5 million.
To put that in perspective that’s Australia’s entire population!
Heads Up! This is worse than the Great Recession
- There could be more than 26 million unemployed people in the US
- Time to Reopen the American Economy
This is the sharpest downturn labour market has seen since the Great Depression in 2009.
There Can be More Than Reported Claims
Based on the assumption that all who filed for benefits are counted unemployed, the latest figures from the Labour Department suggest 20 per cent spike in April unemployment rate. This is just double of the 10 per cent peak seen during the 2009 recession.
However, it is unclear whether the figures really reflect Americans are losing their jobs. It could be just people are getting through the jammed websites and phone lines now to apply for the benefit. It’s been reported widely that bank servers were crashed due to the initial outpouring of the calls.
Torsten Slok, chief international economist at Deutsche Bank Securities told NYT “At all levels, it’s eye-watering numbers.” As big as the unemployment figures look, they don’t capture the extent of layoffs in its entirety. Nor foreshadow the economic troubles that joblessness has set in motion.
Time to Reopen the American Economy
This economic stranglehold has jump-started the conversation to reopen America. The lockdown has to be removed sooner than later to counter the effects of coronavirus on the American economy.
Around the US protests are taking place to reopen the economy. Financially frustrated citizens are taking to roads against stay-at-home orders.
US President Donald Trump has proposed a three-phase reopening of the American Economy. Beginning it with partial reopenings of virus-free zones, and then gradually, reopening the rest of the facilities. However, he left the final call in the hands of the state Governors.