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Jobless claims in the USA soar to 3.28 million in a week

By Lawrence Gash

Latest figure quadruples previous record of 695,000 set in 1982

Last week, 3.28 million Americans filed for unemployment insurance, highlighting the extensive economic blow inflicted by the Covid-19 pandemic. This surge quadrupled the previous record of 695,000 set in 1982.

The US Labor Department stated: “During the week ending March 21, the increase in initial claims are due to the impacts of the Covid-19 virus. States continued to cite services industries broadly, particularly accommodation and food service. Additional industries heavily cited for the increases included the healthcare and social assistance, arts, entertainment and recreation, transportation and warehousing, and manufacturing industries.”

The novel coronavirus outbreak triggered the end of the longest bull market in American history and longest employment boom. In the past month, the S&P 500 experienced its third-worst day ever, Wall Street’s go-to fear gauge, the VIX hit an all-time high and almost all of the market gains seen during the presidency of Donald Trump were wiped.

While a Deloitte poll leading American executives at the start of the year found widespread expectation of a global economic slowdown and potential recession, the lockdowns enforced across the world to limit the spread of the deadly virus have severely exacerbated any underlying fragility.

With the likes of Goldman Sachs and Morgan Stanley predicting a second quarter plunge in US GDP of between 24-30 per cent, it could be some time before the American employment rate returns to normal.

The latest data will not be welcomed by President Trump who had planned to base much of his re-election campaign on his job-creation record. Only two weeks ago, the number of Americans filing for unemployment insurance stood at 211,000, a near-50 year low.

FURTHER READING: UK government orders 10,000 ventilators from Dyson

FURTHER READING: India’s Vedanta goes ahead with $4.5bn investment plan to double oil production

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