A whopping 3.28 million Americans have filed unemployment claims and have applied for unemployment benefits in the last week in response to the economic impact that the Coronavirus pandemic has had on many US companies and their employees.
Why have Americans applied for unemployment benefits?
3.28 million Americans have applied for unemployment claims in the week from 15th March to 21st March, which is a new record considering the short timeframe.
The reason for this sharp increased is pretty obvious; a big chunk of the US economy shut down and a huge number of US companies have laid off workers to offset the negative economic impact caused by COVID-19.
What was the previous record of US unemployment claims?
The previous record of unemployment claims happened back in 1982 when there were 695,000 claims in one week. Last week’s US unemployment figures were nearly five times that number.
Although this is a new record for US unemployment benefits, it is worth noting that – just a few weeks ago – fresh unemployment claims hovered in the low 200,000s, which represented an almost 50-year low.
Will US unemployment benefits applications continue to surge?
If you are wondering whether the number of people applying for unemployment benefits in the US will drop, the answer is most probably NOT.
This sudden surge is, in fact, likely to be only the initial wave of US workers finding themselves needing to apply for unemployment benefits.
Considering that many non-essential businesses are still likely to be shut down while the battle against Coronavirus wages on, the number of affected workers is expected to rise in the short-term. Hence, we are expecting more US citizens to file unemployment claims and benefits in the weeks to follow.
Which jobs are most at risk?
There is every chance we will see further job losses in the US and elsewhere as the US authorities intensify their efforts to control the negative impact caused by the spread of COVID-19.
Those working in retail, hospitality, airlines, small businesses and travel agencies are the ones who risk the most and who are more likely to apply for unemployment benefits in great numbers.
Where have US citizens applied for unemployment benefits?
This rise in claimants was most noticeable in states that were impacted the most by the Coronavirus pandemic. These include:
- New Jersey
What do economists forecast?
Economists and analysts suggest that another 2.5 million unemployment benefits applications are likely to be submitted in the following weeks, while the unadjusted number of new unemployment claims was 2.9 million according to figures released by the Labor Department.
Although just a few weeks ago the US labor market was amongst the strongest in decades, economists and analysts suggest that unemployment levels could rise up to 20% or even higher. This depends on how the Coronavirus situation unfolds in the country and on how long the US shuts down ordinary business.
How is the US fighting unemployment claims?
As unemployment benefits demand is expected to rise, the White House is trying to offset the negative impact and keep unemployment down by providing more benefits and tax incentives to companies if they manage to retain their employees, which is part of the $2 trillion emergency economic rescue package signed off by the US Senate earlier this week.
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