In April statistics, the unemployment rate in the USA is at 14.7%. This is the highest since the Great Depression. A record number of 20 million jobs are lost during a month. This loss is due to the current ongoing recession which occurred due to the shutdowns of businesses that could not losses. An astounding fact is that after the Great Recession period, whatever job growth has been achieved since the last 11 years has vanished in the last month.
This market falling has happened in lighting speed. Recently, in February, the job loss rate is at 3.5% which is a 5-year low number. In March, it is around 4.4%.
In the government report, people who lost jobs in April and didn’t search for a new job were not included in the unemployment rate. Due to these job losses, the proportion of working-age Americans has fallen down to 51%.
For several employed people, the working hours are reduced in the last month. This will have a direct impact on the economy since less money earned will be equal to less money spent which ultimately leads to the economic slowdown. The statistics for underemployment(people who lost jobs plus the people who full-time jobs converted to part-time) have reached 22.8%, which is a record high.
Although some of the companies, malls, restaurants are being opened in some states, mostly all those are shutdown with opening date unknown.
Along with the USA, the situation in Europe is also bad. Unemployment in the Eurozone will soon cross 10%. However, it might stay less than the unemployment rate in the USA. In France, around half of the private sector employees are on a government-paid leave in which they receive 84% of the net salary. A similar system is followed in Germany where the employees receive 60% from the government.
In the last 5 weeks in the USA, around 26.5 million people have applied for unemployment benefits in the country. Currently, the most important question in the USA is that where does this lead to? Although some economists still feel that this situation might turn around soon.
According to the forecast of the Congressional Budget Forecast, the unemployment rate will be at 9.5% by the end of next year. Economists in San Fransico Reserve had issued a paper that says that the unemployment rate could fall down to 4% by mid-2021 if measures are taken correctly in reopening the various firms.
The small businesses in the country are being hopeful that by spending money the economy will be revived. In recent weeks, the payrolls have been leveled off in the small businesses which fell previously. But the bright thing is that job postings did not fall much even in this lockdown situations.