U.S Unemployment Slumps to a New Dip


Author: Maria Andretti

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On Wednesday, the Wall Street Journal Survey announced that there would be an estimated reduction for first-time applicants for unemployment benefits for the first time in recent times. The figure, which stood at 364,000 for the week ending June 26, is estimated to be 350,000 for the week ending on July 3.

Crisis in USA. Man shows empty pockets. USA flag next to bankruptcy man. American is experiencing financial problems. Guy shows a lack money. Bankruptcy of people in America. Poverty in United States

According to UNCTAD, 4.4% of both women and men were unemployed in March 2020, but April rose to 16.1% for women and 13.6% for men the very next month, April.

Because of the negative effect this will have on society, the government expanded the benefit from the Coronavirus Aid, Relief, and Economic Security (CARES) Act to cater for the increased unemployment for 39 weeks.

The new low level is seen as a good point compared to the peak of 6.1 million in the spring of 2020. However, this figure remained above the average 220,000 from the year leading up to the pandemic that induced unemployment.

What explains this reduction?

The downward jobless data can be backed by the fact that hiring increased in May and June, the availability of the Covid-19 vaccine, and the reduction in COVID infections.

350,000 is a good indication that the labor market is healing from the pandemic; hence Arizona and 25 others states have ended the enhanced jobless assistance programs initiated because of the pandemic.

The unemployment rate had crippled the economy during the pandemic, raising the crime rate and reducing morale. The COVID 19 led unemployment played a role in the large reduction in disposable income of families and morale.

Leisure and Hospitality ranks high in employment rating

The Labor Department stated that there had been an increase in job openings, adding that 16,000 job openings were recorded at the end of May. The total number of jobs is now at a new high of 9.2 million since the year 2000. Although in 2000, the unemployment rate was higher than the available jobs.

The Labor Department had earlier posted that there were 9.3 million Americans who were unemployed in May this year and were actively seeking jobs. The new data for available jobs at 9.2 million is almost matching the number of unemployed persons – with Hospitality and Leisure the industry that needed the most employees in May.

Also, a CNBC report in March placed that almost 2/3rd of the jobs in Leisure and Hospitality were from food and drinking centers; these centers reportedly had about 176,000 jobs in February.

One would expect the new crypto drive to be responsible for recent employment hikes. But Binance and other third-party apps still have a lot of ground to achieve the feat.

Treasury yield dips ahead of this week’s Jobless data

On Thursday, the Labor Department announced that the U.S. Treasury yield has fallen to 1.28% ahead of the release of this week’s (ending July 3) jobless claims data. Since the prediction of over a 350,000 new jobless claim, the 10-year Treasury note fell at 3:50 am E.T. 30-year Treasury bond also dipped to 1.899%.

Some members of the Federal Reserve stated that the economy had recovered faster than it was expected. But then the recovery came with an outsized rise in inflation. But they advised that there should not be haste as the market needs to be prepared for any eventualities.

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Maria Andretti is an Administrative Assistant with eight years of experience working alongside the VP finance of a Fortune 500 company.