US unemployment rate increases due to corona virus

The novel corona virus has brought life to a halt in much of the United States. In the meantime, the effects have also become painfully noticeable on the job market.

Washington (dpa) - The unemployment rate in the United States has increased significantly as a result of the corona crisis. It climbed from 3.5 percent in the previous month to 4.4 percent in March, as the US government announced on Friday.

The number of employees decreased by 700,000. The effects of the epidemic were particularly noticeable in the hotel and hospitality industry, where 460,000 jobs were lost.

However, due to a delayed collection of statistics, the new data convey an overly rosy picture. The recent escalation on the labor market has been reflected only to a limited extent: initial applications for unemployment benefits have soared to around 10 million since mid-March. Experts therefore assume that the unemployment rate could actually be 10 percent or even higher.

The rapid spread of the novel coronavirus Sars-CoV-2 has brought public life to a standstill in large parts of the USA. Around three quarters of the approximately 330 million Americans are now subject to exit restrictions imposed by states. Many shops are closed, restaurants and hotels remain empty, countless trips have been canceled. Many employees of closed companies have to apply for unemployment benefits.

Many employees of closed companies must therefore apply for unemployment benefits. In the United States, layoffs are generally possible much faster than in Germany, for example. So far, there has been no regulation in the US like short-time work benefits to stabilize it in crisis situations.

With an economic stimulus package that the US Congress plans to use to pump around $ 2 trillion into the economy, unemployment benefits, which were previously very limited, were expanded last week. Employers should now also be able to leave employees on leave for up to four months instead of firing them. During this time, the state would pay for the salary. However, the new regulation has had little impact on the latest labor market data.

In February - before the virus spread rapidly in the United States - the unemployment rate was still 3.5 percent, the lowest level in decades. The US economy boomed, highs were reported on the stock exchange. President Donald Trump, who is applying for re-election in November, boasted of his successful economic policy. But the corona virus destroyed the good prospects. Trump meanwhile promises that the economy will start again "like a rocket" after the end of the epidemic. However, many analysts expect a slow recovery.

The full extent of the economic upheaval of the coronavirus pandemic for the United States is not yet foreseeable. Nevertheless, many analysts now expect a dramatic slump in the second quarter and a recession all year round.

In the United States, researchers at the University of Johns Hopkins had around 250,000 confirmed infections with the novel corona virus until Friday morning (local time). More than 6,000 people have died as a result of the virus-induced Covid-19 disease.

Press release on the labor market in February, English

Press release on the labor market in March, English

John Hopkins Global Corona Data, English