Unemployment Claims: Can America expect another Great Depression?

Unemployment Claims: Can America expect another Great Depression?

Another week, another 5.2 million people who filed for unemployment. The containment measures are still in force, and as a result, each week, more and more people are losing their jobs.

The report released by the Bureau of Labor Statistics stated that 5.245 million people filed for jobless benefits. It is a weekly improvement from the 6.62 million reported two weeks ago. California alone recorded in the past month more than 3.2 million claims.

In total, more than 22 million people filed for unemployment in just one month. During the past month, the US economy lost what it created since the mid-2009 post-Great Recession.

According to analysts, the latest report made the jobless rate to go as high as 15%. It is a level unseen since the 1930s Great Depression. The number can be even higher, but the workers on the payroll are not part of the report.

It comes as a shock because only one month and a half ago, the claims were as low as 200,000, and only 1.7 million had unemployment benefits.

Another problem arises, as the states don't have enough money to sustain the benefits. New York and five other states can fund up to 10 weeks from their reserves, before turning to the federal government for funding, according to Tax Foundation.

The future doesn't look too golden for the American economy, already in recession, as the analysts are saying. The recession could go on for at least a year, assuming that pharmaceutical companies discover a treatment against the virus, and the economy recovers at a fast pace.

Wall Street didn’t seem to be bothered by this, as USA30 lost 0.4% while TECH100 rose 1.5%.


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Sources: marketwatch.com, businessinsider.com, edition.cnn.com

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Users/readers should not rely solely on the information presented herewith and should do their own research/analysis by also reading the actual underlying research. The content herewith is generic and does not take into consideration individual personal circumstances, investment experience or current financial situation.

Therefore, Key Way Investments Ltd shall not accept any responsibility for any losses of traders due to the use and the content of the information presented herein. Past performance is not a reliable indicator of future results.