The unemployment rate in the US could hit a shocking 32% in the second quarter, as over 47 million are unemployed due to the COVID-19 outbreak, according to estimates published by the Federal Reserve Bank of St. Louis. The unemployment percentage exceeded the 25 per cent rate during the Great Depression and would be highest recorded since 1948, as per the reserve bank's calculation.
St. Louis Fed economist, Miguel Faria-e-Castro, told the press briefing that the figures were shocking and have never been experienced by the US economy. He was quoted as saying that this has never occurred in the history of the United States in 100 years. According to the US media reports, the latest unemployment rate due to the pandemic is worse than what was predicted by St. Louis Fed President, James Bullard, earlier in March. He had reportedly estimated a 30 percent rate of unemployment.
As per the analysis of the combined data of the two leading analysts at St. Louis Fed, at least 66.8 million Americans employed in sales, production and food preparation and services sectors were at higher risk of losing their jobs. Another 27.3 million employed as barbers, restaurant servers and flight attendants, were at risk since their jobs required social proximity, as per the reports. The average of these two accounted for 47 million, over 32.1 per cent, the current unemployment rate as per economist Faria-e-Castro.
Castro told the US press that his estimates barred the section of population and businesses working from home. It also exempts entities availing benefits out of the economic stimulus bills, and grants that fund payrolls and operating costs for the businesses. His analysis excluded workers in search of the jobs.
At least 3.3 million Americans applied for the unemployment benefits last week in view of the coronavirus pandemic while a section was surviving on the paycheck, according to the US Labour Department, a media outlet reported. A majority of Americans, roughly over 59 per cent, were financially struggling even before the coronavirus pandemic hit the world, according to a 2019 Charles Schwab survey.