Saad Ullah
Plummeting Payroll
According to economists at Bloomberg, payrolls in the United States has seen its first decline since 2010, observing a drop of roughly around 701,000 in March this year. The jobless rate has jumped to 4.4%, the highest in the last 3 years with all indicators pointing towards more rise. Bloomberg paints a grim picture with the jobless rate rising to 15%,
Workers who were paid for just a few hours during the early part of the month were still counted as a nonfarm payroll, so the March data are only an early snapshot illustrating the start of unprecedented job losses — in terms of both speed and magnitude — in the economy. April job losses will be at least 30 times larger, in the vicinity of 20 million. Unemployment will soar toward 15% next month.
The President of the Federal Reserve Bank at St. Louis warns that the actual number will be double of thatin the second quarter of 2020.
This is in a stark contrast to what was happening roughly a month ago. The Chief US Economist at FS Investments, Lara Rhame says.
The abruptness with which the economy has taken this step down is so striking. It’s like a hurricane but hitting the entire country at the exact same time.
These depressing estimations are a polar opposite to what was happening only a month ago. There were so many job openings in the US that employers were forced to hire people who were not fit the profile, including “undesirables” such as people with a criminal history. In fact, the strong job rate was one of the basis for President Donald Trump’s reelection campaign.
Unreliable Figures
The data being discussed by economists and experts, however, are unreliable. The actual figures are much higher. The data for jobs is collected on the 12thof each month. So the numbers do not incorporate nearly 10 million people who have requested for unemployment benefit during the latter half of March.
Bureau of Labor Statistics also says that the unemployment rate published would have increased by 1% further, considering that the current figure does not include people who were classified as employed but were essentially not working due to other reasons. The Labor Department also commented that the data does not incorporate the corona virus scare since the data was collected from the March survey was before businesses started shutting down due to the pandemic.
The Trump administration’s, announcement of a 2 trillion Dollar package has a large portion set for small businesses, around USD 350 million, so that they can avoid layoffs. The money transfer, however is a different issue. The dedicated website is marred with issues, causing delays. Rubbing salt on wounds, the USD 1,200 package per person package, meant for individuals who are severely affected by the corona virus, may not see the money arriving until September. Too little, too late for many Americans.
Saad Ullah
