A center for job seekers in New York, March 25, 2020. – John Minchillo / AP / SIPA
- 3.3 million Americans applied for unemployment benefits for the first time in a week.
- This is five times more than the previous record in 1982.
- A massive $ 2,000 billion plan was passed in Congress to support the economy.
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Unheard of in the United States. The number of new unemployed workers has skyrocketed, with more than three million new claims for unemployment benefits in the past week, in an economy that was cut short by the coronavirus pandemic. The unemployment rate should quickly exceed the 10% reached in 2008, and according to economists, it could climb to 30% by the end of the pandemic. “It is possible that we are already in a recession,” said Fed chief Jerome Powell (officially, it takes two consecutive quarters of slower growth).
Unemployment claims are exploding in the United States. More than 3 million new applicants this week, five times more than the previous records of the crises of 2008 and 1982. pic.twitter.com/1Hi6DTy4E9
– Philippe Berry (@ptiberry) March 26, 2020
3.3 million people first applied for unemployment benefits during the week of March 15-21. This represents ten times more new applicants compared to the previous week, which had registered 282,000 new applications. This is a level never seen in the United States, and almost five times more than previous records during the financial crises of 2008 and 1982.
The Labor Department specifies that it is mainly the service industries, in particular accommodation and food services, which are affected. Other sectors are also affected, said the Department of Labor, which quotes “health care and social assistance, arts, entertainment and leisure, transportation and warehousing and manufacturing industries” .
Half of Americans Called to Stay Home
More than half of Americans are now being asked to stay at home to prevent the virus from spreading. The containment measures put in place, to varying degrees, in several metropolises or states of the country – including the most populated like California and New York -, forced restaurants and shops to close temporarily, and heavily affected sectors like transport or tourism.
The most optimistic analyzes expected only 525,000 new requests, while others expected several million. ING analysts noted that “the phone lines went down and the websites collapsed when people signed up. Millions more will apply in the coming weeks. “
Unemployment at 30%?
The president of the St Louis federal reserve, James Bullard, predicted this week that the unemployment rate in the United States could reach 30% in the second quarter. This would be higher than the levels of the Great Depression of the 1920s. It remains to be seen whether the US economy will rebound quickly or not.
The massive economic support plan that received the green light from the Senate on Wednesday evening provides for an extension of unemployment insurance while many Americans are in a precarious situation, paid by the hour, by the day or even by the race. This plan provides assistance of more than $ 2,000 billion and in particular a very important component that will allow companies to keep their employees and continue to pay them.
Unemployment benefits have been significantly extended and self-employed or part-time workers will be able to benefit, as will sick and quarantined people. he coronavirus pandemic infected more than 69,000 people on Thursday and killed more than 1,000 people in the United States, according to Johns Hopkins University count.
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