There has been a sudden increase in the number of people applying for government-funded unemployment benefits. The Labor Department reports that more than 20 million people have applied earlier this month for unemployment benefits.
The situation in the U.S is unfavorable for many reasons. Coronavirus cases continue to increase, government funding is plummeting, and the labor market is recovering at a wavering rate. There is an extreme pressure of the Congress and the White House to devise new strategies to counter this situation.
The Chairperson of the Federal Reserve believes that fiscal stimulus is a necessity for the country right now in order to move towards continuous economic recovery. However, the probability of receiving fiscal relief before the elections in November seems low.
Coming to the jobless claims, the highest number was during the Great Recession and now due to the coronavirus, this record has been broken exceeding 665,000 applicants. In May, businesses were allowed to open again and continue their operations. However, in the services industry demand is still more or less constant. Companies are still announcing layoffs and the availability of jobs continues to decrease. Thousands of airline workers have also been laid off due to the decrease in international traveling.
In the beginning, financial services and technology industries were not affected in the beginning but are now also vulnerable to the negative consequences of the coronavirus.
The government introduced the PUA, Pandemic Unemployment Assistance for self-employed workers. More than 6 hundred thousand applications have been filed for this program as well. However, the state of California has suspended PUA due to fraudulent applications.
Economists have stated that the number of people opting for unemployment benefits has reduced because the eligibility for the unemployment benefits is 26 years of age and around one million people have exhausted them.
A member of The Century Foundation is reported to have said that unemployment will remain a problem due to the coronavirus since employees who must be present on-site for their jobs have no other option.
Owing to current conditions, the interest rates have been decreased to almost zero and the Fed has also been contributing money into the economy. The government now does not have any funding available to assist suffering businesses. An employment benefit of 600 dollars finished in July and a 300-dollar program was initiated however the funding for it is already depleting.
Where almost all the industries are facing major hurdles and difficulties in running their businesses, the housing industry is flouring and has not been affected.