The United States breaks down each week the number of workers applying for unemployment benefits. This statistic becomes, therefore, a leading indicator that allows the monthly behaviour of the labor market to be anticipated, information that is especially useful in a context such as the current one, marked by the economic uncertainty caused by the coronavirus pandemic.
If we look at this data, we can see that, in total, there are 26.5 million Americans who have applied for unemployment benefit over the past five weeks. This figure is estimated to imply a 20.6% unemployment, consistent with the worst figures since 1934 when the United States was experiencing the hardest moments of the Great Recession unleashed by the crack of 1929.
However, if we break down the figures week by week we find that the rate of destruction of jobs would have been wiped out by the end of March and it would have been several weeks in moderating. We see it in the following graphic:
As can be seen in the graph above, the number of applications for the benefit rose on March 21 by 3.3 million people, shooting up on March 28 by another 6.9 million beneficiaries. However, the final data for April 4 showed the first sign of moderation, since the weekly increase was reduced to 6.6 million benefits.
Since then, the figures have described a declining slope curve that invites us to believe that job destruction would have already hit the ceiling. Thus, the increase registered on April 11 was 5.2 million applicants, while the data corresponding to April 18 left the weekly figure at 4.4 million claims.
The Wall Street Journal breaks these figures down State by State and finds that the trend continues in the vast majority of Union territories, except in the case of Florida, Connecticut or West Virginia, where bureaucratic problems prevented the correct processing of these aids in the early stages of the crisis.
Larry Kudlow, the director of the White House Economic Council, has acknowledged that the US economy is going through a “very difficult” situation but has confessed that he is “impatient to reopen the activity as soon as possible”, in line with the plans that Donald Trump has presented.
Kudlow explained on Fox News that ” the growth rate of infected people has flattened in just one month, because new cases have dropped from 45% to less than 3% growth. I think we will see a transition period during the Next month, and as soon as possible, we will have recovery underway and begin to recover some of the lost employment.”
Trump’s top economic adviser has called for “optimism” and stressed that “a significant part of the layoffs are only temporary and will be reversed as soon as the situation returns to normal.” Kudlow has also advanced that the government wants to approve in the coming week’s various tax relief measures to benefit the most affected industries.