Another 3.8 million Americans lose jobs as US unemployment continues to grow
Pace of job losses appears to be slowing but figures
increase and many people yet to receive benefits as backlog hits US system
Dominic
Rushe in New York
@dominicru
Thu 30 Apr
2020 13.31 BSTLast modified on Thu 30 Apr 2020 16.20 BST
Another 3.8
million people lost their jobs in the US last week as the coronavirus pandemic
continued to batter the economy. The pace of layoffs appears to be slowing, but
in just six weeks an unprecedented 30 million Americans have now sought
unemployment benefits and the numbers are still growing.
The latest
figures from the labor department released on Thursday showed a fourth
consecutive week of declining claims. While the trend is encouraging, the rate
of losses means US unemployment is still on course to reach levels unseen since
the Great Depression of the 1930s.
The figures
are also still undercounting the number of people out of work. Some states are
still dealing with backlogs of claims after their systems were overwhelmed by
the massive volume of applications.
Florida has
become a notable black spot. As of Tuesday the state had received more than 1.9
million claims and processed just over 664,000, one of the slowest rates in the
nation.
Kia
Washington, 22, lost her job at Scarlett’s, a club in Fort Myers, on 16 March.
She has yet to receive unemployment benefits or the $1,200 stimulus cheque she
is entitled to from the federal bailout.
Washington
said every time she has tried to file her claim online she has been kicked out
of the system, and that she had been trying at 4am or later in the hope of
getting through but to no avail. She sent in a paper application three weeks
ago but has yet to have a reply.
She is
currently living with her grandparents. “If I didn’t have them, I would be out
on the streets,” she said.
The pace of
layoffs may slow further as states begin to open up for business once more. But
some have warned that relaxing quarantine rules could trigger another wave of
infections and shutdowns and the virus has already done significant damage to
the economy.
Many large
US companies have announced cuts to staff or are planning layoffs. Boeing
announced this week that the coronavirus had delivered “a body blow” to its
business and is weighing laying off 16,000 people, a 10% cut to its 161,000
workforce. Hertz, the car rental company, recently laid off about 10,000
employees in North America and is reportedly considering bankruptcy.
On Tuesday
the commerce department announced the US economy shrank 4.8% in the first three
months of the year, its steepest decline since the last recession and ending a
decade of near constant economic growth.
Kevin
Hassett, senior economic adviser to Donald Trump has warned that the jobless
rate in the US could spike to between 16% and 20% by June.
According
to the latest Department of Labor figures, the insured unemployment rate – the
number of people currently receiving unemployment insurance as a percentage of
the labor force, was 12.4% for the week ending 18 April , the highest
percentage recorded since the department started releasing those figures.
Next Friday
the bureau of labor statistics releases its official jobs report for themonth
of April. The monthly report is regarded as a more accurate snapshot of the
jobs market but often lags the weekly report.
In March
the jobless rate rose 0.9%, the largest single-month change since January 1975,
to 4.4%. The pandemic shutdowns started in late March, so April will give a
more accurate picture of their impact on the jobs market. JP Morgan is
predicting unemployment could reach 20%.
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