The coronavirus pandemic has plunged the U.S. job market into the worst crisis in decades. So far, no end to the downward spiral seems in sight.
Washington (dpa) - Despite a gradual relaxation of the corona requirements in most US states, the historic slump in the labor market continues: Since March, almost 41 million people have now applied for unemployment benefits.
In the week to May 23, 2.1 million new applications were added, as the US government announced on Thursday. The applications are considered an indicator of the short-term development of the labor market. According to analysts, the unemployment rate for May should be more than 20 percent. In February it was still 3.5 percent.
The previous week there had been a good 2.4 million new applications. Analysts had now expected fewer applications because many states are already loosening their exit restrictions. Many shops, factories and restaurants are allowed to open again under certain conditions, which should slowly have a positive effect on the job market. It was therefore likely that a number of those who have applied for unemployment benefits since March are now back on the job. A current figure of how many millions of Americans are currently unemployed will not be released until the end of next week, along with the unemployment rate for May.
In April the unemployment rate was already at 14.7 percent. However, due to errors in the data collection, the competent authority warned that the quota could already be around 20 percent. That would be the highest value in many decades. Employees can be fired much faster in the United States than in Germany, for example. In addition, there is no automatically stabilizing element such as short-time work, which would enable employers to keep their employees at reduced costs, at relatively low risk.
In addition to the layoffs of employees in restaurants, shops and hotels, which could be reversed relatively quickly, many large companies have also announced cuts. The ailing aircraft manufacturer Boeing, for example, said on Wednesday that it would part with over 12,000 employees through voluntary severance payments and layoffs.
At the beginning of the year, the US economy shrank more than previously known. Economic output in the first quarter averaged 5.0 percent below the level of the previous quarter, as the Ministry of Commerce announced. In a first estimate, a slump of 4.8 percent was determined.
In the United States, growth figures are extrapolated over the year. They indicate how the economy would develop if the pace continued for a year. This annualization is not used in Europe, which is why growth data are not directly comparable.
So far, with the support of both parties, the US Congress has approved stimulus packages of around $ 2.7 trillion, which is a good ten percent of the annual US economic output. This includes hundreds of billions of dollars for a loan program that is designed to make it easier for employers to keep their employees employed despite the slump in sales. The effect of the program on labor market data is so far unclear.
The US Federal Reserve (Fed) has also launched programs to prevent the economy from further slowing down. Fed chief Jerome Powell estimates the corona pandemic has plunged the US economy into the worst recession since World War II. For US President Donald Trump, the crisis is extremely inconvenient; he is applying for re-election in November.
In the United States, data from Johns Hopkins University had around 1.7 million known coronavirus infections by Thursday morning (local time). As a result, more than 100,000 people died. The pathogen Sars-CoV-2 can trigger the lung disease Covid-19.
Unemployment rate press release in April, English