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Analysts say America’s economic scars will remain
4.4 million Americans applied for unemployment benefits last week, as the country’s economic situation continues to deteriorate due to the Corona virus.
This brings the total number of jobless claims to 26.4 million since mid-March, representing more than 15 percent of the total workforce in the United States.
However, the new figures indicate a decrease in the rate of these requests in the third week, which may raise hopes that the worst is over.
Richard Flynn, director of Charles Swap Financial Services in Britain, says there are indications that the layoffs have peaked.
He adds that the main question now is when will the closing state end. What will happen then?
Experts have warned that the world is facing the worst economic slowdown since the Great Depression of the 1930s.
According to the International Monetary Fund, the US economy is likely. USA It faces a 5.9 percent drop.
In just five weeks, the number of jobless claims exceeded the number of jobs created during nearly a decade of expansion, which ended in February.
According to a survey by the Pew Research Center, 43 percent of households have experienced job losses or wage cuts due to the crisis caused by the Corona virus.
The United States government has allocated more than $ 2 billion to provide aid and has taken steps, including expanding the reach of people receiving unemployment benefits.
The Labor Department said 16 million Americans received benefits during the second week of April.
Many people had difficulty accessing offices looking at applications.
John DeGnan, a Nevada real estate worker, says the phone lines are always busy: “It is very frustrating because you have no control or information. You are very concerned about Covid-19, and you realize that the country’s economy is collapsing and I don’t have much in my savings anymore, maybe what’s enough for a month. “
Among the budget allocated by the government to stimulate the economy, a program to help small businesses worth $ 349 billion has run out of funds in two weeks.
Congress is expected to approve a $ 310 billion increase in appropriations this week. But there are criticisms that some loans are cheap and do not benefit small businesses.
The reviews indicated that the top companies benefited from almost two-thirds of the money, not from small stores. The preference was for large companies with prior relationships with banks.
The United States administration responded to this by issuing new guidelines for the loan program intended to rank the top companies.
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Police officers deliver documents that present unemployment claims to citizens
“We are waiting,” said Larry Highland, the owner of the New York restaurant, who asked the first day that banks began receiving orders.
He adds that he may not benefit even if he gets the money if he keeps closing. The money is supposed to be spent on wages within eight weeks. He wonders how he will bear the burden of this loan, and does not know when and how the restaurant will operate again.
President Donald Trump, who is seeking reelection in November, wants to ease some of the closings.
Some states began easing the restrictions, along with mounting protests against closings elsewhere.
Analysts say that even if the number of jobless claims continues to decline, the scars of America’s consumer-based economy will remain. The damage has already been done, according to Paul Ashworth, chief economist at the Center for Research in Capital Economics.
