The US economy cut 17 million jobs amid a pandemic

WASHINGTON: It is increasing at a jarring rate, with data showing that 17 million have lost their jobs since mid-March, as authorities rush to apply a tourniquet to stop the damage from the coronavirus pandemic.

The Federal Reserve launched a series of new loan programs to inject $ 2.3 trillion into the damaged, but Federal Reserve Chairman Jerome Powell tried to reassure them that the recovery could be robust.

The Fed announcement came at the same time as the Labor Department report showed that 6.6 million more people applied for unemployment benefits last week, after 6.9 million the week before, and 3.3 million in the week ended. March 21st.

That's a surprising reversal of historically low unemployment in the world's largest economy, forced to shut down to stop the spread of COVID-19. Analysts expect the unrest to linger for months, and the unemployment rate to rise to double digits in April.

Weekly data indicates that the coronavirus pandemic dwarfs job losses from the 2008 financial crisis, and the head of the International Monetary Fund, Kristalina Georgieva, warned on Thursday that the world is facing the world's worst emergency since the Great Depression.

The total of 17 million unemployed in the USA. USA It's just over half of the nearly 30 million job losses we expect to result from the spread of the coronavirus, which would be three times the number of job losses that occurred during the last recession, Oxford. The economy said it projected that the Unemployment rate would reach 14% in April and 16% in May.

The US government. USA It has mobilized to stop losses, and the Federal Reserve has announced a new $ 2.3 trillion financing measure aimed at helping businesses, households, and state and local governments facing a cash crisis.

Included in the measures is the High Street Loan Program, which can buy up to $ 600 billion in loans owed by small and medium-sized businesses that were in good financial shape before the crisis, the Fed said in a statement.

Another program, the Municipal Liquidity Fund, will offer up to $ 500 billion in loans to states and municipalities through the direct purchase of short-term debt.

The Fed is also supporting the new Paycheck Protection Program launched last week as part of the massive $ 2.2 trillion rescue package that Congress approved late last month. The central bank will purchase all loans issued by private banks for a total value of $ 349 billion allocated to the program.

Powell acknowledged that the United States is facing a truly rare economic crisis and that unemployment is increasing at an alarming rate, but the Fed is committed to using its emergency lending powers for the duration of the crisis.

There are many reasons to believe that the economic rebound, when it comes, can be robust, Powell said in a speech.

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Ian Shepherdson of Pantheon Macroeconomics said there are signs that initial jobless claims will decrease in the coming weeks.

Google searches for 'unemployment file' are now falling steadily from one week a week to about a third, he wrote, forecasting a decline in claims next week to 4.5 million, a number that would have been unthinkable ago. a month before stores and businesses were forced to close their doors nationwide.

IMF Director Kristalina Georgieva said the coronavirus pandemic could cause the worst economic consequences since the Great Depression, turning global growth negative and requiring a massive government response.

Even in the best-case scenario, the IMF expects only a partial recovery next year, assuming the virus will fade later in 2020, allowing normal business to resume as imposed blockades are lifted to contain its propagation.

In Washington, policymakers are already trying to reinforce the $ 2.2 trillion emergency measures that are now being implemented.

The bill includes direct cash payments to Americans, expanded unemployment insurance, and a tumultuous rollout of a $ 350 billion small business loan program.

Banks have been frustrated by the lack of clear guidelines on how the measure works as they face an avalanche of cash requests.

Treasury Secretary Steven Mnuchin wants an additional $ 250 billion for these loans, but that will have to go through Republicans who control the Senate and Democrats who lead the House of Representatives.

The Small Business Administration told AFP that as of Thursday morning, there were more than 454,000 applications totaling nearly $ 118 billion, but it was unclear how much had reached borrowers.