For the US economy GDP, 1.43M are jobless. And there’s still no relief in sight. This week, the number of workers filing for unemployment hit 1.43 million. This is the second week in a row that more workers filed for unemployment than the previous one. It is also the 19th straight week that more than a million people lost their jobs.
1.43M Jobless Claims While US Economy GDP Falls 33%
Production is also besieged. The Bureau of Economic Analysis said that gross domestic product fell 33% in the 2nd quarter. Before the pandemic shut down economic activity, the average GDP hovered at two percent. The 33% drop is the steepest decline since 1947.
Related Article: GDP Plunged Worst-Ever 32.9% In Q2
The United States is amid a resurgence in coronavirus cases across the country. As of July 29, there are a total of 4,339,997 cases recorded, with 148,866 deaths. A politicized divide over mask-wearing has made imposing health measures difficult.
The reopening of the economy last May kick-started the economy for a bit. Jobs became available again, and spending increased. Consumers were buying, dining, drinking, and traveling again. A resurgence of coronavirus cases happened in June, and most outlets had to shut down again. With the lost businesses, jobs got lost as well.
The number of jobless workers shot up as well. Initial claims for unemployment benefits totaled 1.43 in the week ending July 25. This is 12,000 higher than the previous week.
The effects of joblessness are already getting felt. The Census Bureau’s latest survey reported that 30 million Americans are getting hungry. 24 million Americans say that they have “sometimes not enough to eat.” An added 5.4 million say they often “did not have enough to eat. The Bureau also reported a 3% increase in households that have experienced a loss of income, from 4.8% to 51.1%.
Unfortunately, things may get worse before they get better. The $600 unemployment bonus given to the jobless as part of the CARES Act is expiring this Friday. A new stimulus package is currently undergoing negotiations between the Democrats and Republicans. The two sides are still far apart on the final form of the bill. One of the contentious provisions is unemployment. Democrats want to continue the dole-out, as there are not much in available jobs. The GOP doesn’t like the idea nor the amount. They said that the unemployment bonus incentivizes people to not get back to work. They are open to bringing the bonus back, but with a lower amount.
Long Road to Recovery
Federal Reserve Chairman Jerome Powell maintained the interest rates to near zero. He acknowledged that it may take a long time to recover, even if the economy reopens and many people get back to work. “Even if the reopening goes well — and many, many people go back to work…It is still going to take a fairly long time for parts of the economy that involve lots of people getting together nearby” to recover. He added: “Those people are going to need support.”
The third quarter is a bit more promising, though. Economists expect that the economy will grow at an 18% annualized rate in the third quarter. Expect states to reopen their economies at a slower pace so as not to cause another outbreak. A hopeful arrival of vaccines by the 4th quarter can also jumpstart the economy. No matter the efforts though, the GDP will most likely remain below last year’s levels.
Watch this video as the US economy GDP claims 1.43M are jobless:
How far do you think will this slump go? Do you think things will get much worse before they get better? Or do you think the worst is behind us? Let us know what you think by commenting below.