By
Bhushan Akolkar
April 17th, 2024
Millions of Americans already have been laid off as states and localities shut down nonessential businesses. About 3.3 million people have filed for unemployment benefits in U.S.
more Economists at the United States Federal Reserve Bank of St. Louis estimated on Monday that the coronavirus crisis could lead to a loss of up to 47 million jobs across the country, with the unemployment rate reaching 32%. The truth is millions of people in the U.S. already have lost their jobs due to the coronavirus crisis and the worst of the damage is yet to come.
St. Louis Fed economist Miguel Faria-e-Castro wrote:
“These are very large numbers by historical standards, but this is a rather unique shock that is unlike any other experienced by the U.S. economy in the last 100 years.”
There are a couple of important warnings that Faria-e-Castro describes as “back-of-the-envelope” calculations. The thing is workers who may drop out of the labor force, thus bringing down the headline unemployment rate are not accounted for in these numbers. Also, those calculations do not predict the collision of some government stimulus packages that have recently passed which could continue unemployment benefits and give money to the companies for not cutting staff.
How Many People in U.S. Will Lose Their Jobs in Q2
Be it as it may, more and more people in the U.S. are losing their jobs. The whole jobless picture doesn’t look exactly nice. A record 3.3 million Americans filed initial jobless claims for the week ended March 21. Economists that were scrutinized by Dow Jones expect another 2.65 million people to join them this week.
Friday’s nonfarm payrolls count for March is expected to show a decline of just 56,000, but mostly just because of the statistical distortion.
According to the Bureau of Labor Statistics (via FRED), the civilian labor force consisted of 164.5 million people, and the unemployment rate was 3.5%. This means that there were around 5.76 million unemployed people in the U.S. in February. In Fed’s calculation, they have presumed that the labor force remains constant and that none of those 5.76 million people would be able to find a job in the second quarter of 2020.
The important question is, says Faria, how many people will be laid off during Q2? He then writes about high-risk occupations mentioning Charles Gascon who used 2018 occupational data from the BLS to estimate how many employees are at high risk of layoff due to social-distancing measures.
66.8 million people in the U.S. are employed in occupations that are at high risk of a layoff, it means they may lose their jobs soon. These include occupations in sales, production, and food preparation and services, among others.
Initial Jobless Claims Rise to Record High
Meanwhile, initial jobless claims in the United States soared by 3,001,000 to a record-high of 3,283,000 in the week ending March 21 as a result of the coronavirus outbreak and its impact, the U.S. Department of Labor stated in a report released on Thursday. The report stressed that jobs in accommodation and food services were most affected by the pandemic.
Previously, the largest weekly number of jobless claims had been recorded in 1982 and stood at just under 700,000.
The insured unemployment rate remained unchanged on a weekly basis at 1.2% for the week ending March 14.
Meanwhile, the seasonally adjusted insured unemployment during the same week was 1,803,000, jumping by 101,000 from the previous week’s revised level. The four-week moving average amounted to 1,731,000, a rise of 27,500 from the previous week’s revised figure.
Also, President of the Federal Reserve Bank of St. Louis James Bullard said last week the second quarter will see most disruption from the ongoing pandemic, while the third quarter could be “transitional.” The final three months of 2020 and the first three of the next year could be “boom quarters,” the official said.