With 1 in 6 U.S. workers out of work, U.S. unemployment is reaching Great Depression levels. More than 4.4 million laid-off Americans applied for unemployment last week. Approximately 26 million people have filed for unemployment since the onset of the crisis.
The crisis, precipitated by “The Great Lockdown” in the words of the IMF, is not only gripping the U.S., but the whole world, as U.S. House lawmakers, some of whom were clad in masks and bandanas, debated a nearly $500 billion extra in bailout money.
“At this point it would take a miracle to keep this recession from turning into the Great Depression II,” Chris Rupkey, MUFG managing director and chief financial economist, noted Thursday. “It is going to take years not months to put these pandemic jobless workers back to work at the shops and malls and factories and restaurants across the country.”
Job losses are quickly spreading from retail and hospitality sectors to suppliers and other industries, according to ING Chief International Economist James Knightley. “We’re sitting here today at a 17% unemployment rate, which is a disaster for the country,” BNY Mellon Chief Strategist told Yahoo Finance. “Because the longer this goes on, the greater the likelihood that those individuals… become detached from their employers.”
The job losses in the last five reports were “more than the entire Great Recession a decade ago,” Rupkey added. 15.38 million people were out of work at the peak of the 2008 financial crisis.
“Net, net, jobless claims are warning that the worst isn’t over yet for the American economy with businesses and consumers alike being sucked down into the abyss of the pandemic recession,” Rupkey wrote. “The risks to the outlook are that the economy is digging itself such a big deep hole that its ill become harder to climb back out of it.”
Since the de-industrliazation of the U.S., which started in the 1970s, most American jobs are now in the service sector. Most of these jobs depend on consumer demand, which has collapsed amid “The Great Lockdown.”