Due to the ongoing Corona crisis, experts expect unemployment in the US to rise further. The Department of Labor in Washington is releasing the weekly number of new first-time applications for unemployment benefits today (2.30pm AEST).
Since mid-March, more than 26 million people in the US have lost their jobs – more than ever before in the world’s largest economy.
The new figures will show initial applications for unemployment benefits in the week leading up to 25 April. In the previous week, there had been 4.4 million new applications. They are seen as an indicator of the short-term development of the US labour market and have recently pointed to a dramatic economic downturn. Before the pandemic worsened, the number of first-time applications had regularly been below 100,000 per week.
The U.S. unemployment rate is already expected to be around 15 percent, according to experts. However, there is no exact value yet, because the statistics could not keep up with the brute speed of job losses. In February, the rate was still at an extremely low 3.5 percent.
The rapid spread of the coronavirus has largely brought public life in the US to a standstill. The vast majority of the roughly 330 million Americans are subject to exit restrictions. Many shops and businesses are closed, restaurants and hotels remain empty, flights are cancelled en masse, events are cancelled. Many employees of closed companies therefore have to apply for unemployment benefit. Moreover, redundancies are generally much easier to make in the US than in Germany, for example.
By February, the U.S. economy had been still buzzing, the stock market had reported highs and experts expected economic growth of just over 2 percent. But the rapid spread of the coronavirus since the beginning of March has soured the good economic outlook – now the US is headed for a deep recession because of the Corona crisis. In the first quarter, economic output already declined significantly, although the pandemic there had only worsened in March. Experts warn that the world’s largest economy is facing its biggest growth slump this year since the Great Depression nearly 100 years ago.
From January to March, U.S. economic output fell 4.8 percent year-on-year from the previous quarter, the Commerce Department said on Wednesday. It was the biggest economic downturn since the global financial crisis. The data is the first estimate, so the figure could be corrected at the end of May or the end of June. In the fourth quarter of 2019, the US economy grew at a solid 2.1 percent.
In the US, more than a million people have been infected with the novel coronavirus, according to data from the University of Johns Hopkins. More than 58,000 people have died. The pathogen Sars-CoV-2 can cause the lung disease Covid-19.