US Unemployment Benefits Hit 22m in 4 Weeks

• US Unemployment Benefits Hit 22m in 4 Weeks

The US measures to curtail the spread of COVID-19 have impacted the labour market as more Americans filed for unemployment benefit last week.

According to the US Labor Department, 5.245 million more Americans filed for unemployment benefits last week to bring the total number of Americans that have filed for unemployment benefit in the last four weeks to 22 million, wiping out all the job gains since the 2008 recession.

“While today’s jobless numbers are down on last week, they still mean that all the job gains since the financial crisis have been erased,” wrote Seema Shah, chief strategist at Principal Global Investors. “What’s more, with many workers, including those in the gig economy, not included in these numbers, labor market pains may be even worse than these numbers suggest.”

“Concerns for the second half of the year may be underestimated,” she added. “Although governments are looking to lift lockdowns, the re-opening of economies will be only gradual, compounding financial strains for businesses and households, suppressing demand and suggesting a slower economic recovery.”

Experts are worried that many of the people presently unemployed may not be rehired given the severity of the situation.

“As we fully know the current state of the labor market with mass waves of layoffs, the key question turns to how many of these people will be rehired when the economy starts to reopen,” said Peter Boockvar, chief investment officer at the Bleakley Group. “We can assume it will take a long time for that to happen but hopefully we’re getting closer to at least getting started.”