Sun, June 16, 2024

Coronavirus and Its Impact on the U.S. Labor Market

Coronavirus, labor market, and ongoing situation

The coronavirus continues to dominate the headlines for several months. This virus that originated in China reached all regions of the country as well as other countries. Currently, the U.S. has the largest number of confirmed cases. There are more than 600,000 patients across the country. As stated above, the country is struggling to cope with coronavirus, as pandemic created numerous problems for the U.S. Let’s have a look at the U.S. labor market to learn more about the situation.

It is a well-known fact that the labor market was in its best shape in nearly 50 years. Moreover, the country’s economy was growing for more than a decade. However, the coronavirus changed the situation for the worse and as a result, millions of Americans lost their jobs.

Importantly, nearly 17 million people applied for the unemployment benefits since mid-March. The companies decided to close their factories, restaurants, etc. to minimize the damage caused by a coronavirus. Moreover, another 5.2 million people filed for the unemployment benefits in the week ended on April 11. Thus, the number of people who applied for the benefits surpassed 20 million.

Labor market and expectations The future of the U.S. labor market

The leisure, travel, and hospitality industries suffered the biggest losses, but other sectors such as manufacturing also experienced serious problems.

According to the March jobs, report unemployment reached 4.4% from a near 50-year low of 3.5%. Moreover, people should take into consideration that the March jobs report does not take the most recent tide of joblessness into account.

Furthermore, the unemployment level could reach double digits in April. Also, economists at America’s big banks estimate that unemployment caused by coronavirus could reach 15% or more. However, this is not the end of the story as according to economists from JPMorgan, unemployment could reach 20%.

Unfortunately, the state of the U.S. economy is far from being ideal. The economy will get back on track once the virus is defeated but not all jobs will reappear at once.

Hopefully, as factories, restaurants, shopping malls, and others will open their doors, many of the jobs are expected to come back. Nevertheless, smaller companies that more susceptible to economic shocks might disappear due to a sudden recession. As a result, thousands of employees are under risk as it will be tough to find a job.

Another detail is that Moody’s expects an unemployment rate of 6.5% by the end of the year. It means that compared with December 2019, Moody’s expects the level of unemployment to increase by 3%.

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