August 8, 2020

The United States estimates that unemployment will approach 20 percent, an unprecedented figure since the Great Depression


Madrid

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The White House Economic Advisor Kevin Hassett warned this Sunday that unemployment could approach 20 percent as a consequence of the coronavirus crisis, an unprecedented figure in the country since the Great Depression of the 1930s the last century.

“Taking into account the (stoppage) requests, it seems that we will probably approach 20 percent in the next report,” Hassett said in remarks to CNN.

In his interview, Hassett has also referred to the latest Covid-19 cases confirmed by White House staff, noting that know it’s safer to stay home than go to the presidential headquarters. “We have all been exposing ourselves to risks (…), but we want to take them on because we love our country,” he stressed.

14.7 percent unemployment

Hassett’s statements come in line with the official unemployment figure known on Friday, which shoots up unemployment to 14.7 percent after destroy 20.5 million jobs in April, according to data from the Department of Labor. In March, the crisis associated with the pandemic destroyed 870,000 jobs.

In October 2009, the peak of the global financial crisis that started in 2008, the US unemployment rate reached 10 percent, while the all-time high was in December 1982, when it reached 10.8 percent. Thus, the unemployment rate has escalated in a month to its highest level since records began in 1948. Furthermore, during the Great Depression, unemployment reached 24.9 percent in 1933, the year in which The New Deal was launched.

Regarding job destruction, the elimination of almost 22 million jobs between March and April has caused the number of employed persons to drop to their worst level since February 2011. The worst month for employment after the crisis in 2008 occurred in March 2009, when 800,000 jobs were destroyed.

The record of job destruction for the entire historical series, which began in 1939, was recorded in September 1945. In that month 1,959,000 jobs were cut as a result of the end of World War II on the Pacific front after the surrender of Japan.

Long-term unemployed

The number of long-term unemployed, those who have been unemployed for a minimum of 27 weeks, decreased to 939,000 people, equivalent to a reduction of 225,000 unemployed. Its weight with respect to the total number of unemployed contracted by more than 10 percentage points, to 4.1%.

For its part, the total number of unemployed people was 23,078 million people, so it increased by 15,938 million unemployed in March. For its part, the participation rate in the labor market fell by more than two percentage points, to 60.2%. Compared to March, the active population decreased by 6.432 million people.

By groups of workers, the unemployment rate among women was 15.5%, more than 11 points higher than that of March, while among men it increased by 9 points, up to 13%. Unemployment among young people doubled in the last month, to 31.9%.

In the fourth month of the year, the number of employees in the construction sector sank at 975,000 people, while the manufacturing industry laid off 1.33 million workers. The biggest falls were in the leisure, tourism and hospitality sector (7.653 million less), transport and retail (3.057 million less), education and health (2.544 million less) and professional services (2,128 million less)

The duration of the average work week increased by one tenth, to 34.2 hours in April. At the same time, median hourly earnings grew $ 1.34 from the previous month, to $ 30.01.

Likewise, the Department of Labor has reported that the number of jobs created in February has been revised downwards, to 230,000 (45,000 fewer), while the figure for March has been adjusted to -870,000 jobs (169,000 fewer) .

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