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Largest economy in the world nears Great Depression levels of unemployment
Nearly 3 million Americans filed initial jobless claims last week, according to the latest data from the US Department of Labor, bringing the total number of people made redundant since the start of the Covid-19 crisis to 36.5 million people.
That the number of claimants dropped for the seventh week in a row will be of little importance. The world’s largest economy is now saddled with the worst levels of unemployment it has witnessed since the Great Depression of the 1930s.
Although official unemployment figures reflecting this surge will only come about at the end of the month, the American unemployment rate is widely expected to breach 20 per cent for the first time since the presidency of Franklin Roosevelt.
Last week the US government listed the unemployment rate at 14.7 per cent, or almost 20 per cent, if adjusted for furloughs.
Although the number of new weekly claimants has fallen from its record peak of almost 7 million in mid-March, a steady and substantial flow is expected to continue for the coming weeks, as states suffer from significant backlogs and bureaucratic overload.
The latest figures revealed that the sharpest rises in unemployment were suffered by those without college educations, African Americans and Latinos.
Such news will further disturb the US president Donald Trump. In the weeks preceding the virus the number of weekly jobless claims stood at a 50-year low while black unemployment had fallen significantly. The president had hoped to run on these successes to secure reelection in November.
With one in four US workers now on benefits, Congress may take up Fed Chair Jerome Powell’s recent call for “additional fiscal support.” The central banker admitted such further intervention would be expensive, but vowed it would be “worth it if it helps avoid long-term economic damage.”
For more news go to currency.com
