U.S. Unemployment Skyrockets Due to COVID-19

The COVID-19 pandemic proved to be more than just a seasonal flu. For months now, business operations have been frozen and owners are struggling to balance their company’s resources. As a way to save money and cut spending, some establishments have laid-off their workers. Some even shut down for good due to the pandemic. 

Unemployment By The Figures

As Forbes reports, jobless claims in the United States have declined for the tenth week in a row. June 11 reports bring the twelve-week total to 44 million. We could remember that sometime in March, the number of claims in a single week shot up to as many as 6.9 Million. Surprisingly, the Labor Department revealed last may that the U.S has added 2.5 Million jobs even if 21.5 Million Americans are claiming their unemployment benefits during that month. 

The U.S reported that they have officially entered recession in February, in the same month that they reported their 50-year low in terms of the unemployment rate at 3.6%. This event ends the 11-year expansion of the U.S. economy. Labor statistics show that the U.S hit an unemployment rate of 14.7% in April and 13.3% in May. However, some experts point out that May’s unemployment rate could be significantly higher at 16.3% due to the error in initial data classification. 

Painting the Future of the U.S Economy

Federal Aid under the CARES Act is running low. The act provides an additional weekly benefit of $600 on top of the benefits provided by the state. This proved to be important for some 40 million people who lost their jobs during the pandemic. 

The U.S Labor Department revealed some shocking news regarding the future of the economy. Their predictions dictate that unemployment will be at 9.3% by the end of the year, and 6.5% by the end of 2021. Somehow, the Central bank also states that the Economy will fall 6.5% this year, and grow by 5% in 2021. 

“The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term.” 

Federal Reserve

They promised to keep supporting the economy by not retaining the pace of its quantitative easing. They also committed to continuing extensive bond-buying measures at its current pace.