the US Economy was tested for coronavirus, and the results were disappointing. The main test of the quarantine — the level of employment showed that the disease progresses and threatens the largest the business body planet serious problems that will require a long rehabilitation.
Unemployment in America has reached unprecedented since the great depression of 14.7%. Just over a month quarantine has destroyed more than 20 million jobs in the main economy in the world, showed for the first time, Talon a detailed report on the labour market, published on Friday.
This is an unprecedented failure for the country that a decade after the financial crisis of 2008-2009, with enviable persistence more than 100 months in a row was created, and did not lose jobs and eventually by February we have reduced unemployment to the lowest in half a century, values of 3.5%.
But there are nuances: for example, the majority of the unemployed temporarily not occupied, but maintained space, while others prefer the low salary huge benefit — until the end of July, the government increased it to an average of 4 thousand dollars per month with the usual one and a half thousand. To do this, America gets into trillion debt, unprecedented even for the main debtor of the planet. But more on that below.
For President Donald trump all this bad news. He needs to be re-elected for a second term in November, and before the pandemic his leverage was impressive economic growth. Trump claimed some credit for the ability to create jobs and increase wealth in the richest country in the world. The stock market was breaking records, the voters did not pay attention to doubt that it is a merit of trump, and not Barack Obama, his predecessor.
However, the coronavirus has not just brought US one of the leaders in the mournful death rate from the virus, but also put an end to the longest in American history, a ten-year phase of economic recovery.
the Economy has stopped, and Trump can’t wait to start it, despite the threat to life and health of citizens.
“will Suffer if people? Yes. somebody suffer greatly? Yes. But we just have to open up the country, and we must do it as soon as possible” he said this week.
Since the great depression between the two world wars of the last century, unemployment in the US never taken such alarming proportions: the previous peak in the 1980s, the years barely exceeded 10%.
But even then, the decline was 10 times lower — at least 2 million jobs for the month.
to Quickly win back losses and return to doverennym record low unemployment rates in the coming years will not work, warn the economists. However, the hope for a serious rebound in the second half there. And here’s why.
unlike the great depression, when Americans had lost jobs Windowsdefinitively and irrevocably, most new cases now are people on unpaid leave. They account for almost 80% of the increase in unemployment, estimated by Bloomberg.
When the quarantine will be removed, many of them immediately get back to work. Others will fall into line when they stop paying increased benefits.
Approved by Congress and signed by trump anti-crisis measures at the astronomical sum of more than 3 trillion dollars include additional unemployment benefits to $ 600 per week until the end of July.
as a result, the average payout will reach to $ 978 a week. At a time when the USA swept the tide of the pandemic, half of all who are now entitled to increased benefits, earned less — 957 dollars a week, the newspaper Wall Street Journal U.S. Department of labor.
In conditions when the freelancer or the trucker is more profitable to receive benefits, and not to return to work, unemployment data can be considered artificially inflated. On the other hand, they are just incomplete.
Since only cover people of working age who are actively looking for work. And do not take into account those who would like to, but can’t find a permanent place and does odd jobs for underemployment. And most importantly — those who are desperate to find a place that in a situation with quarantine automatically deletes from the labor market (and thus from the data on unemployment) the whole cohort of people in certain occupations from the flight attendants and waitresses to DJs and cloakroom attendants.
Hidden unemployment before the crisis was a problem. While the government trumpeted a record low level, the backbone of the working population in their Prime work just didn’t. For example, every tenth man in the age of 25-54 years. As a result, official unemployment among this category barely exceeded 3%, though not really worked more than 12%.
the Problems of the labour market a consequence of the disruption of the American economy. The reason for the quarantine, not only in USA but throughout the world.
the Impact of recession in the world on Americans illustrates the trade: over the past month the flow of goods to U.S. ports decreased by 10%, estimated the Agency Bloomberg. Largest trading partner — China. With him at the trump in recent years, the problems, and judging by its rhetoric, rely on the rapid recovery of trade volumes is not necessary.
China is the largest creditor of the United States. He is the holder of us public debt by more than $ 1 trillion. And now just a time when America needs the money.
Only three months of the second quarter of America is 3 trillion dollars — more than the usual annual volume of placement of government debt. In the crisis of 2009, the Ministry of Finance for the whole year attracted almost half, and the usual PR��the past year — three times. But for a whole year.
At this time, the annual amount of additional debt financing may exceed $ 4 trillion. This is almost equal to the entire US budget for this year is 4.8 trillion. But the total debt may be higher than the annual size of the U.S. economy, constituting approximately 20 trillion dollars.
Authorities are confident that they will find the creditors. The US national debt is very popular among investors. In addition, the dollar is a reserve currency, and the U.S. is free to print it indefinitely.
Now the Ministry of Finance issues bonds and the Central Bank (fed) partially redeems them on printed money. The government is more profitable to issue issue debt at current zero rates than to print and distribute the money now, and too late to sterilize them at the higher rate when (and if) you will return to inflation.
the Duty of Americans at the end of the first quarter reached a record of 14.3 trillion dollars. The increase was provided mainly by mortgages, loans for education and buy cars. When preparing this report, the quarantine was not. The following is certainly the first violin will play the credit card debt: after the government, ordinary Americans are going further into debt, and spend future earnings.
based on the fact that the virus will leave and economic growth will return.
