As coronavirus which has killed about 75,000 Americans bites harder into America’s economy, the country precariously heads into deep recession as unemployment rate tripled to 14.7%.
In just a month the world’s largest economy is getting swept off its balance with the first round jab of the pandemic with most American workers bearing the weight as they accept unprecedented 20.5 million job cut in April for the first time in the history of the nation being the highest since 1930’s Great Depression.
Speaking about the harshest downturn in the country’s economy, Ryan Sweet, who is the head of monetary policy research at Moody’s Analytics said the scenario was devastating projecting that it might takeq years for the country to recover from this.
“There’s someone behind each of these numbers. It’s going to take years to recover from this. There’s a case to be made that a lot of these are temporary layoffs, so hopefully people can return to work quickly as we begin to reopen the economy — but there’s no guarantee in that.”
From its onset, the pandemic had the low-wage workers such as restaurants, retails and hospitals clawed in the economic quagmire as most were laid off initially temporarily as a result of lockdowns.
Surprisingly, in just seven weeks which ended on May 2, about 33.5 million Americans have applied have file for unemployment benefit, highest number in the history of the country.
In April There were 7.7 million job losses in hospital and leisure. Restaurants and drinking places suffered 5.5 million job losses while 1.3 million job losses for factory workers with personal and laundry services having two-thirds of the total.
With the economy partially restarting and taking off slowly, there is tendency that some job and pay cut could be made permanent as the economy is about to regains its balance.
According to Lydia Boussour of Oxford Economics, it is more likely that layoffs would go further into May which would mean “second round” of unemployment and corporate offices and professional positions would unavoidably bear the brunt in addition to 2.1 million already suffered in professional, retail trade and businesses services.
In May, the job losses will likely be in the “second-round” of companies including more professional positions, corporate offices, and higher-earners,” Lydia said.
Moody’s Analytics has projected a further unemployment peak of about 17% in coming months starting from May if a second wave of infections hit and businesses are closed down after states gradually reopens businesses.
The consistent rise in job losses is an indication that the economy would have to be restarted on a large scale which presents President Trump with a huge challenge of working around containing the pandemic to make sure the economy takes off once again on the right footing.
