Tue, January 31, 2023

Economy: Millions of Americans Lost their Jobs

unemployment and coronavirus pandemic

The world’s largest economy is struggling to deal with various problems created by the coronavirus pandemic. It is worth mentioning that before the pandemic unemployment level was low. Nevertheless, authorities in the U.S. imposed restrictions to limit the spread of the virus. It was the right decision but as officials introduced strict measures millions of Americans lost their jobs.

As a result, over the past two weeks, ten million Americans filed for the unemployment benefits. Importantly, more than 6.6 million people applied for unemployment benefits in the week that ended on March 28. This result surpassed expectations. Moreover, this number is double the all-time set the previous week. During that week 3.3 million Americans applied for the benefits.

Interestingly, the pre-coronavirus record dates back to October 1982, when 695,000 people filed for the unemployment benefits. However, last week’s claims were nearly ten times larger than the pre-coronavirus record. For example, during the Great Recession, the worst result was 665,000 in March 2009.

In the case of the unadjusted basis, the total was 5.8 million. Some economists consider this number more relevant as seasonal adjustments are less relevant due to the unusual impact of coronavirus on the economy.

Unemployment rate and U.S. economyEconomy, coronavirus and unemployment benefits

Unfortunately, there is a chance that the unemployment rate is even higher than reported by the government for several reasons. The system is overloaded due to the huge number of people who would like to file unemployment claims.

As a result, in the coming weeks, more and more people would follow the footsteps of their neighbors, friends, and others who already applied for the benefits.
The biggest groups looking for work are bartenders as well as athletic coaches and wait staff.

Interestingly, the four-week moving average, which smooths fluctuations, was 2.054 million. It means that compared with the previous week this number increased by 327,250. As a result, the four-week moving average reached the highest point since January 14, 2017.

It is important to take into consideration that, those at the lower end of the wage scale experienced the biggest problems. Some of the employers reduced the number of workers or in best cases, decided not to hire new employees.

Recently, the White House and lawmakers reached a historic $2 trillion deal. Hopefully, the Senate, as well as Congress, already approved the stimulus bill. Thanks to this historic bill, workers have the opportunity to stay on unemployment benefits for a longer period of time. Moreover, this bill expanded the scope of workers who can receive benefits.

The first quarter of 2020 was tough for the U.S. economy. Hopefully, thanks to the rescue package, it is possible to support the economy. Private and governmental organizations should work together to tackle problems caused by the coronavirus pandemic. They should do everything they can to boost the U.S. economy.

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