Another 1.5 million Americans have applied for unemployment _ Eurozone economy heading for 'sharp decline' of 13 percent

• 2020-06-21
• Traiding Idea

Another 1.5 million Americans have applied for unemployment

The U.S. Department of Labor said initial claims for unemployment benefits for the week ending June 13 reached 1.508 million. That's just under 1,542 million claims a week earlier. 

Demand for unemployment benefits rose to a record high of 6.867 million in late March.

Current demand is twice as high as the unemployment rate in the Great Depression between 2007 and 2009.

"People will say claims are coming down, but for an economy that is reopening, that is a huge number," said Steven Blitz, a senior U.S. economist in New York.

Manufacturing, retail, information technology and oil and gas companies have said they will cut jobs. State and local governments are also laying off workers.

Economists expect an acceleration in layoffs when 3 trillion stimulus package runs out.

Policymakers predict that the unemployment rate will be 9.3 % by the end of this year. That rate in the United States jumped from 3.5 % in February to 13.3 % in May.

The U.S. Federal Reserve announced in June that it would have to support the U.S. economy for years. Federal Reserve Chairman, Jerome Powell, told lawmakers there is significant uncertainty about the timing and strength of the recovery.

As economic activity slowed as a result of the Covid-19 pandemic, the U.S. economy officially entered a recession in February, ending a long period of expansion.

Eurozone economy heading for 'sharp decline' of 13%

European Central Bank President, Christine Lagarde, has warned of a major recession in the European Union, saying the recession would increase unemployment.

"The EU economy is experiencing a dramatic fall," Lagarde told EU leaders at a video conference.

She said the eurozone was heading for a severe 13 % slump in the second quarter of this year. He said that according to the European Central Bank, GDP in the eurozone would fall by 8.7 % in 2020 and grew by 5.2 % in 2021.

According to the head of the European Central Bank ( ECB ), the full economic impact of the Coronavirus pandemic has not yet been reflected in the labor market, and the unemployment rate in 19 eurozone countries is likely to reach 10 %.

ECB said last month that the economic impact of the Covid-19 pandemic had been significant and had increased financial instability in the eurozone.

The bank noted that the eurozone governments' vast fiscal response to the Coronavirus pandemic had raised doubts about their ability to repay debts and increase the risk of countries leaving the euro.