By now the question is no longer has coronavirus pandemic caused unemployment in economies across the world but rather by how much are economies experiencing rise in unemployment rates attributed to the pandemic.
The pandemic has increased elasticity in the U.S labor market as millions of workers have lost their jobs in the country since the pandemic kicked in. Any U.S resident working in the formal sector and have lost their job is supposed to have filed for unemployment benefits by last week.
The labor department in the U.S has released a report this week indicating job losses in the country will increase in May making it the third consecutive month unemployment levels are on the rise in the world’s largest economy.
The labor department made this announcement just one day after Federal Reserve Chair Jerome Powell issued a warning of a prolonged period of slowing growth and stagnant incomes.
According to the recent report, a whopping 20.5 million jobs were lost in the U.S during the just concluded month of April. This is the largest job loss in the country in such a period since the Great Depression of the 1930’s.
“We are on the back end of the first wave of layoffs, but now we are transitioning from the natural-disaster phase to the recession phase. That’s why so many white collar jobs are still being lost. We effectively amputated a large section of the economy, and we are going to limp along afterwards,” said chief economist at Wrightside Advisors in New York, Josh Wright.
Citing data from Reuters survey of economists, additional 2.5 million jobs in the United States have been lost during the first week of May. The number might seem high but it’s less than the 3.169 million jobs lost during the previous week.
On a positive note, job loss numbers in United States have been decreasing since the record 6.867 million job losses recorded in the last week of March. Since that week ending March 28, number of people who have filed for unemployment benefits has increased to around to about 36 million.
Unemployment levels in the U.S bounced to an all-time high of 14.7% in April. Previous record stood at 10.8% recorded way back in November 1982 during the deep recession.
Another form of unemployment, this one consisting of workers who have given up looking for full time jobs increased to 22.8% in April down from 8.7% in March.
According to Andrew Hollenhorst, an economist at Citigroup in New York, this trend of increasing unemployment levels will go on for at least up to end month. “We would expect a peak should arrive sometime in late May or June, with continuing claims falling as rehiring resumes,” said the economist.