unemployment-to-peak-in-april-in-the-united-states

Unemployment to peak in April in the United States

The pandemic acted on the American economy like a tsunami, the wave of which claimed millions of jobs. With more than 30 millions of Americans who have already applied for benefits, the unemployment rate will reach an all-time high.

In April, unemployment, the figures for which will be released on Friday, could be around 20%, twice as much as what had experienced the country at the worst time of the Great Recession of 2009, reaching levels of the Great Depression of the years 30.

In February, it was 3.5%, the lowest for 50 years.

On Wednesday, the publication of the report on employment in the private sector gave an overview of the extent of the damage: 20, 236 millions of jobs were destroyed, according to the monthly survey of the business services firm ADP.

The figures are all the more catastrophic since they only reflect the 12 first days of the past month, date on which stops the investigation, warned ADP in a press release.

In April, job losses affected all categories of businesses.

Small (less than 50 employees) have thus lost some 6 million jobs, medium-sized companies 5, 26 million and large companies (more than 500 employees) 8, 96 million.

“Job losses of this magnitude are unprecedented,” said Ahu Yildirmaz, co-director of the ADP research institute.

“The total number of job losses in the month of April alone was more than double the total number of jobs lost during the Great Recession,” he said.

It is the services sector, with more than 16 millions of jobs lost, which pays the heaviest price. And half of the jobs destroyed concern the leisure and hotel sector.

Businesses manufacturing goods lost 4.2 million jobs, more than half of them in construction and almost 1.7 million in manufacturing, according to the report.

The ADP data are considered a barometer of the employment report to be published on Friday by the Ministry of Labor.

Private and public sectors combined, economists expect 28 million jobs lost in April.

In comparison, 8.6 million jobs were lost during the two years of the global financial crisis.

Blacks, Hispanics and women

The first wave of job losses in March hit airlines and hotels, then restaurants and factories, with states having ordered closings. And the schools sent the students home.

The speed with which the labor market has gone from its best performance in 50 years, to the worst situation in recent history, makes any comparison difficult. , for the statisticians of the Labor Department (BLS), who produce this monthly report.

The closest point of reference for reading the data is natural disasters, in particular “hurricanes, because they tend to be important and to affect important periods or areas”, explained to AFP BLS Associate Curator Julie Hatch Maxfield.

The jobless claims soared from March, and the four weeks of April saw 20 millions of new claims.

But these figures could underestimate the real extent of the shock, as many people could not submit their files because the systems were overwhelmed. And many people, ineligible, did not even try to register.

And among those who have kept their jobs, many have had their hours reduced.

This crisis could well erase the improvements made during the 10 years of growth, especially among minorities.

Like blacks and Hispanics, often employed in the service sectors whose activity has been paralyzed, women are also the first victims of this crisis, forced to stop working, since the schools were closed.

The US economy contracted 4.8% in the first quarter, of which only the last few weeks were concerned by the massive containment measures. The fall will be much greater in the second quarter.

Government assistance programs could, however, cause a temporary rebound in employment in May and June.

But if consumption does not pick up by July, small businesses “will have to lay off again,” warns Diane Swonk, chief economist at Grant Thornton.

The Trump administration and Congress have released a total of 669 billion dollars in loans to small and medium-sized businesses to help pay the wages of their employees.

More than 71 000 people died from COVID- 19 in the United States, where more than 1.2 million cases have been identified, according to Johns Hopkins University.