The millions of Americans who have lost their jobs in recent weeks due to the coronavirus pandemic will have a devastating effects on the economy going forward as workers are left without pay.
Losses in April alone could push the unemployment rate to 16%, according to James Knightley, chief international economist at ING. If another 10 million Americans file jobless claims in May, that would push the unemployment rate to 22%, he said.
“Thankfully this is below the 24.9% peak experienced in 1933, but we have to remember that one third of Americans aged 18-65 are not classified as employed or unemployed – they are students, early retirement, homemakers, carers or sick,” Knightly wrote in a Thursday note.
“This leads us to yet another sobering statistic – that less than half of working age Americans will be earning a wage next month,” he said.
The estimate comes amid a huge spike in unemployment claims driven by the coronavirus pandemic. In the past five weeks, 26 million Americans have filed for unemployment insurance, a staggering record-breaking number that’s quickly dwarfed job losses seen in the Great Recession. – READ MORE
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