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US employment sees historic collapse

A new raft of bleak economic data laid bare the crippling worldwide impact of the coronavirus pandemic on Thursday, as the US reported stunning job losses and hard-hit Europe moved to further ease lockdown measures in a bid to get people back to work.

With shops and factories closed nationwide due to COVID-19, nearly all of the jobs created in the US economy in the last decade have been wiped out since mid-March.

The US is home to the world’s largest and deadliest coronavirus outbreak, with more than 75,000 fatalities and 1.2 million cases reported as of Thursday, and 2,448 deaths in the past 24 hours, according to Johns Hopkins University.

And the economic damage has been swift and shocking. The new jobless claims announced Thursday bring the total to a staggering 33.5 million newly unemployed, roughly one in five Americans who had been employed in February before the crisis hit.

The consensus among economists is that the jobless rate will leap to just over 16 percent from a historic low of 3.5% in February, but some analysts also believe the rate could be much higher.

And even that double-digit rate underestimates the impact of the virus, since many employees are simply leaving the workforce altogether.

The shocking job losses figures are expected to be confirmed in Friday’s Labor Department monthly employment report for April — the first full month of the lockdowns.

It will be the “largest collapse in history,” Roiana Reid of Berenberg Capital Markets said in an analysis of the April employment report.

In the two years of the 2008 global financial crisis, the world’s largest economy lost 8.6 million jobs. During the recovery, from February 2010 to February 2020, 23 million positions were created.

US President Donald Trump and his economic team are hopeful for a quick rebound, once the virus is under control and businesses can reopen and rehire their workers.

“This country can’t stay closed and locked down for years,” Trump said Thursday.

“We will vanquish the virus, we will defeat the enemy. We will not fail,” Trump said.

But with new claims for unemployment benefits still at staggering levels, the jobless rate could go much higher still.

“We knew it was bad out there but it is looking like it is even worse than we thought,” economist Joel Naroff said in his analysis.

“Now I am wondering if we will hit 40 million, which would take us to an unemployment rate of 25% or more. That is truly scary, as you have to go back to the early 1930s, during the Great Depression, to see anything nearly like that,” he said.

Despite nearly $3 trillion in financial aid approved by Congress in March alone and trillions more in liquidity provided by the Federal Reserve, there is a growing fear that the temporary shutdowns imposed to contain the spread of the virus will become permanent for many companies.

Also Thursday, the White House said a military aide — reportedly working as a valet for Trump — had tested positive for coronavirus, but the president has not been infected.

Nations around the world are under huge pressure to ease the economic pain caused by measures to halt the spread of the virus, which has claimed more than 266,000 lives, infected 3.8 million and left half of humanity under some form of lockdown.

Germany and France reported major slumps in industrial production and Britain said its economic output would plummet by 14% this year.

Britain was on Thursday reviewing lockdown measures, with Prime Minister Boris Johnson expected to offer a roadmap on easing restrictions on Sunday.

Johnson — who himself was hospitalized for COVID-19, the disease caused by the virus — said: “We will proceed with maximum caution.”

Britain has registered the most deaths in Europe at 30,076 along with Italy at 29,684, followed by Spain (26,070 fatalities) and France (25,809).

The easing of restrictions has already begun in Germany, Europe’s largest economy, while France is due on Monday to start emerging from a lockdown that began in mid-March.

But French Prime Minister Edouard Philippe said four regions including the greater Paris area would see a more limited easing of restrictions as the number of cases “remains high — higher than we would have hoped.”

Germany said its industrial production fell by 9.2% month-on-month in March, while in France it dropped 16.2%.

In Brazil, Economy Minister Paulo Guedes said the country could begin to face food shortages in a month’s time and “production may become disorganized, leading to a system of economic collapse, of social disorder.”

Brazil has been hit hard by the pandemic, with more than 135,000 cases and 9,146 deaths. That is more than half the 16,000 deaths in all of Latin America.

Globally, airlines and travel are among the sectors worst hit by the pandemic, with flights grounded worldwide and social distancing measures severely limiting leisure and business trips.

The World Tourism Organization said Thursday that the number of international tourist arrivals will plunge by 60 to 80% in 2020 because of the pandemic.

Cruise lines, shut down because of the pandemic, are still struggling to repatriate tens of thousands of crew members stranded aboard ships at sea.

Moscow Mayor Sergei Sobyanin announced that lockdown measures would be extended in the capital until May 31.

In Britain, studies have shown that ethnic minorities are at much greater risk from the pandemic, with the Office for National Statistics saying black men and women were more than four times more likely to die with coronavirus than white people in England and Wales.
In Brazil, a similar pattern has emerged, with blacks dying at a higher rate, statistics show.

Globally, virus cases surpassed 3.8 million and deaths climbed to 269,000 as of Thursday, Johns Hopkins reported.

Original: TOI – AFP