Nearly 39 million Americans out of work as states start to open up
● Heavy job losses in Europe too ● World infection total hits 5 million
The number of Americans applying for unemployment benefits in the two months since the coronavirus took hold in the US has swelled to nearly 39 million even as states from coast to coast gradually reopen their economies and let people go back to work.
More than 2.4 million people filed for jobless aid last week in the latest wave of lay-offs from the outbreak that has triggered nationwide business shutdowns and brought the economy to its knees, the Labor Department said.
That brings the running total to a staggering 38.6 million – a job-market collapse unprecedented in its speed.
The number of weekly applications has slowed for seven straight weeks. Yet the figures remain alarmingly high – ten times higher than normal before the crisis struck.
And the continuing rise shows that even though all states have begun reopening, the job market has yet to snap back and the outbreak is still doing damage to businesses and destroying livelihoods.
“While the steady decline in claims is good news, the labour market is still in terrible shape,” said Gus Faucher, chief economist at PNC Financial.
Federal Reserve Chairman Jerome Powell said over the weekend the US unemployment rate could peak either this month or next month at 20 per cent to 25 per cent – a level unseen since the depths of the Great Depression.
As of April, unemployment stood at 14.7 per cent, a figure also unmatched since the 1930s. And the true rate is even higher, because millions of Americans were not officially counted as unemployed since they were not looking for a new job, presumably because nearly everything was shut down anyway.
More than five million people worldwide have been confirmed infected and about 330,000 deaths have been recorded, including more than 93,000 in the US and around 165,000 in Europe, according to a tally kept by Johns Hopkins University.
European countries have also seen heavy job losses, but robust government safety-net programs in places like German and France are subsidismore ing the wages of millions of workers and keeping them on the payroll.
Across the US, some companies have begun to rehire their laid-off employees as states have eased restrictions on movement and commerce. Last week, the three major American automakers, plus Toyota and Honda, recalled roughly 130,000 factory employees for the first time in two months.
Still, major employers continue to cut jobs. Uber said this week that it will lay off 3,000 employees because demand for rides has plummeted. Digital publishers Vice, Quartz and Buzzfeed, magazine giant Conde Nast and the owner of The Economist magazine announced job cuts last week. Meanwhile, doubts are growing over ambitious plans by European governments to use contact-tracing smartphone apps to fight the spread of the virus as they ease their lockdowns.
The apps can help authorities determine whether people have crossed paths with those who are infected.
Italian Premier Giuseppe Conte said his country’s app will begin testing in coming days, and Spain plans to try out its technology at the end of next month in the Canary Islands.
As for the search for a vaccine, drug maker Astrazeneca said it has secured agreements to produce 400 million doses of a still experimental and unproven vaccine that is being tested at the University of Oxford.