Greatest Issue Ahead: Unemployment in the USA

Judy Rubio

Unemployment Rates Higher Than Ever

Now that COVID-19 keeps on rapidly spreading all around the globe, the USA included, economists predict that the number might skyrocket in the nearest few weeks. Initial unemployment claims will hit the highs that haven‘t been seen and experienced by the nation for several decades. It is reported that for the last two weeks statistics have been extremely frightening. Now there are nine million jobless individuals compared to four million only half a month ago.

Unfortunately, the coronavirus does not seem to let us live our regular lives this month. The situation is dire and it is going to be even worse. The US Labor Department gathers and presents fresh data on a daily basis illustrating what is going on in the US labor market. Last week economy suffered too much stress and this cannot go unnoticed – it all started with almost 3.3 million. Nevertheless, this is just the beginning and these figures will definitely change. According to experts, they will be significantly higher due to the fact that some states are flooded with applications. Reuters report that the amount is so huge that it is not even possible to process them all.

Changes in Data Recorded Last Week

It is very likely that the USA could be heading for the highest unemployment ever. Although March 28 recorded slightly under four million unemployment claims, Grant Thornton reported that this number will soon surge to nine million. We should bear in mind that revisions to earlier data will also be taken into consideration.

From March 23 till March 30, Goldman Sachs expected six million claims. At the same time, Bank of America had its own statistics and put it half a million at over five million. There will be as many as up to 5.3 million benefit claims soon. JPMorgan Asset Management predicts two million claims, which is probably the lowest forecast.

The surge for unemployment benefits has never been as dramatic as now. This is quite understandable, on the other hand, since the USA is the most affected area where the country’s population is suffering from COVID-19 infections more than any other nation. The number of patients is increasing. The massive layoffs across the USA are caused by lockdowns, because that‘s one of the recommended prevention measures – currently almost 80% of the US citizens are under quarantine. The stimulus package of $2.2 trillion is another reason why the number of jobless claims is so high. There are plenty of those who intend to benefit from the system and all the guarantees it provides.

Predictions Made by Market Analysts

Economists predict that the country may face its most terrifying unemployment percentage ever and it could turn out to be far worse than that people experienced during the Great Depression. The country was not ready to go through this sort of crisis and finding new ways to solve problems that will arise in the near future might take quite some time.

Luckily, it was recently noticed that there has been a rise in key US indices. This can help erase and flatten the losses that the market has been lately suffering. Dow Jones Industrial Average futures experienced a rise (400 points). At the same time, S&P 500 futures rose over 1%. The same is reported by the representatives of Nasdaq Composite where futures were up more than 1%. It is hard to foresee the outcomes since what is happening across the country cannot always be controlled and improved. Despite all the negative statistics, experts hope to see positive trends in the US market, which, in turn, will help solve issues related to unemployment.