More than 22 million people in the world’s largest economy have now filed for unemployment. The record high in America came as 5.2 million additional workers submitted their claims last week – and one expert says more is to come, even as President Trump has unveiled his plan to get the economy back up and running.
Goldman Sachs economist, Joseph Briggs warned we could see the figure doubling over the next few weeks. He said, “We expect that claims will remain very elevated in coming weeks as states struggle to clear backlogs and more companies lay off workers in response to the shutdown.
“Including this week, we currently project an additional 20 million in initial jobless claims through the end of May, after which we expect new claims to fall to levels consistent with prior recessions.”
The jobless claims have spiked as unemployment has spread across much of the economy. The retailer Best Buy has been forced to furlough 51,000 employees while professionals such as software developers and programmers are also being hit.
The International Monetary Fund has predicted a 5.9% contraction of the US economy for 2020, as factory output fell to 1946 levels and retail sales slumped 8.7% to disturbing lows in March.
President Trump has vowed to get the country back to work as soon as possible and is known to be eager to get the economy back on track, vowing to be the “comeback kid” after stating that the peak has passed.
These figures saw gold rally during trading yesterday (Thursday) at $1,725.90 an ounce. There is good news if you are looking to invest however as one expert says that jobless claims could have peaked – which would give markets some much needed confidence and could see gold receding a little, creating a timely window to buy.
CIBC Economics’ Andrew Grantham said there is good news hidden within the data, saying “the fact that continuing claims aren’t rising quite as quickly as previous initial claim figures would have implied [suggests] that at least some of the claims have been short-term in nature, and accounting for a likely drop in labour-force participation, we don’t expect the increase in unemployment rate to be quite as severe [as forecast]”.