Millions of US jobs lost amid pandemic may never return
Both small and large businesses are forced to lay off employees or send them on unpaid leave
Millions of Americans are losing their jobs due to the suspension of operations of both large and small companies amid the coronavirus pandemic.
A week ago, nearly 3.3 million Americans applied for unemployment benefits. This figure is expected to grow rapidly in the coming weeks: according to preliminary forecasts, by mid-April, about 40 million people will be unemployed..
Before the pandemic hit the United States, the country had 5.8 million unemployed – 3.5 percent of the workforce, which totals 164.6 million. In the previous six months, this indicator changed little, which is one of the key indications of a healthy state of the economy..
Now, the world’s largest economy is suffering heavy losses due to the coronavirus, which President Donald Trump has called a “terrible disaster.”.
On Tuesday, the investment bank Goldman Sachs Group released a forecast that the US economic downturn in the second quarter will be even sharper than previously estimated: 34 percent instead of 24.
According to economists at Goldman Sachs, the unemployment rate in the United States will reach 15 percent by the middle of the year, that is, 25 million people will be unemployed. Earlier it was predicted that unemployment will reach 9 percent.
The head of the Federal Reserve Bank of St. Louis, James Bullard, expects unemployment in the second quarter to reach 30 percent, and GDP will decline by 50 percent..
It is estimated that 190,000 stores have closed in the country, accounting for about 50 percent of total retail locations. On Monday alone, major retailers Macy’s, Kohl’s and Gap announced they are laying off a total of 290,000 employees..
The John F Kennedy Center for the Performing Arts in Washington sent 96 National Symphony Orchestra musicians on unpaid leave, although Congress agreed last week to donate $ 25 million to aid this cultural site, where all concerts are currently canceled..
Some employers initially intended to continue to pay salaries to employees, but in many cases this decision had to be abandoned due to the fact that it is not clear when the pandemic might end..
The consulting company Mckinsey Company estimates that about a quarter of American households already live paycheck to paycheck, and 40 percent of Americans cannot cover the $ 400 unexpected expenses without borrowing..
The $ 2 trillion economic aid package approved by Congress and signed by Trump last week will expand unemployment benefits. Usually, states pay only a small fraction of their regular wages to unemployed people, however, in accordance with the anti-crisis plan, they will be paid an additional $ 600 per week for the next four months..
Goldman Sachs economists predict third-quarter recovery and 19 percent GDP growth.
“Our estimates suggest that just over half of short-term losses will be compensated by the end of the year,” experts say..
Leaders in many states across the country have instructed residents not to leave their homes in the coming weeks, except in cases of urgent need: to buy food or medicine, seek medical attention, or play sports alone or with family.
Due to these orders, many non-essential establishments are forced to cease operations, although the definition of “first need” varies from state to state..