Despite the maximum pressure to get the US through the recovery phase as quickly as possible via rampant lifting of restrictions and coronavirus mitigating measures, it still appears America’s economy is just spinning its wheels in a mud puddle.
According to the latest Department of Labour data released on Thursday, an additional 1.314 million more Americans filed for unemployment benefits for the first time during the pandemic, thus continuing the sixteenth consecutive week of jobless claims exceeding 1 million. Although the figure is slightly more optimistic than the 1.375 million that was anticipated, the data nonetheless suggests that the US is still far from achieving an economic recovery reminiscent of pre-pandemic levels.
Over a span of 16 weeks, the total number of jobless claims reached a staggering 49.993 million – the largest unemployment figure in America’s history. Likewise, the coronavirus pandemic has wiped out all of the last decade’s 22.13 million job gains. Nonetheless, the situation is most likely going to continue on the downward spiral for some time. The CARES Act has recently increased the jobless claims eligibility criteria to include gig workers and those that are self-employed, in addition to extending the maximum number of weeks for benefits.
With such grim statistics gripped tightly in hand, it is no wonder that House Speaker Nancy Pelosi is proposing an additional trillions of dollars in relief aid to go towards unemployment benefits and direct payments, coronavirus testing, as well as financial support for local and state governments. Although there is a growing momentum for the proposal of a second relief legislation, it will most likely be met with significant opposition given that many Americans are receiving more in benefits than they did while working.
Information for this briefing was found via Bloomberg, US Department of Labour, and Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
