What started as the worst-case scenario for US unemployment is quickly becoming reality. Some economists now see the jobless rate surging to 20 per cent as soon as this month -- and there’s no guarantee it would stop there.
About 5.5 million people are estimated to have filed for unemployment last week, in data due out Thursday. That would push the four-week total above 22 million, roughly one-in-eight of the workforce -- essentially wiping out all the job gains since the last recession.
And jobless claims are expected to stay in the millions for several more weeks, as the impact of the coronavirus cascades through the economy. It all adds up to a worse recession than initially thought, and probably a more difficult recovery once the pandemic subsides.
Many people have been struggling for weeks to file for unemployment benefits via overwhelmed and outdated websites. And while the government has rushed to help by authorising trillions in stimulus, delays in getting the money to households and businesses -- as well as a possible shortage of program funds -- could push the jobless rate higher or keep it elevated for longer.
“We don’t have the administrative systems to get $2.2 trillion (Dh8tn) into the economy in three weeks,” said Claudia Sahm, director of macroeconomic policy at the Washington Center for
Equitable Growth. “What we have right now is a race between the virus wreaking havoc on the economy, and the relief trying to get out.”
If initial jobless claims don’t begin leveling off, a 30 per cent unemployment rate moves from “the realm of possibility” to “the most likely forecast,” said Ms Sahm, a former Federal Reserve economist.
That would be triple the 10 per cent seen in the wake of the global financial crisis and even above the roughly 25 per cent seen during the Great Depression, though the methodology for that figure was different. The median estimate of economists in a Bloomberg survey earlier this month was for a second-quarter jobless rate of 12.6 per cent.
The official unemployment rate only includes those actively looking for a job. That means that the 1.76 million increase in Americans outside the labor force in March -- the largest jump in seven decades of data covering people not actively looking for work -- isn’t reflected in the jobless rate. And those figures cover early March, before the vast majority of coronavirus-related layoffs.
Historically, jobless claims also understate the number of people out of work. In 2018, only 26 per cent of unemployed people who had worked in the last 12 months actually applied for benefit payments, according to the Bureau of Labour Statistics.
Uptake is likely to be higher now, however, given the unique circumstances of Covid-19.
“Oftentimes people didn’t take the unemployment insurance because there was an opportunity to find another job. That is not the case right now,” said Diane Swonk, chief economist at Grant Thornton. “People who never took unemployment before would take it in this environment because they have no choice.”
One possible bright spot in the data: Pennsylvania, which initially saw outsize weekly figures compared with other states, has begun to show a slower pace of claims, offering hope that other states may follow.
Michael Feroli, chief US economist at JPMorgan Chase, said most of the layoffs in the US have likely already occurred, noting how most of the stay-at-home orders went into place more than a week ago.
Initial jobless claims may stay elevated given the backlog, Feroli said. He forecasts an unemployment rate of 20 per cent in April and holding around there in May, before sliding back down when people head back to work.
The figures may fluctuate, though. Ms Swonk said government stimulus could pull workers back onto payrolls in May or June, but if financing from the program runs out, unemployment may jump again later in the year.
Also, the claims figures so far also likely don’t account for all of the gig workers and self-employed Americans who have suddenly lost their main source of income. While those workers aren’t reflected in the Labour Department’s payrolls figure -- which is derived from a survey of employers -- they play a role in the calculation of the unemployment rate, which comes from a separate survey of households.
Some states are just beginning to open applications for pandemic unemployment assistance, or the aid made available to the self-employed and those not typically eligible for unemployment benefits by the stimulus bill passed last month. Others may take weeks.
And it’s possible millions more job losses are in the pipeline for the coming months.
“There are people, there are businesses who are still hanging on that are going to lose their grip,” Ms Sahm said.
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
Going grey? A stylist's advice
If you’re going to go grey, a great style, well-cared for hair (in a sleek, classy style, like a bob), and a young spirit and attitude go a long way, says Maria Dowling, founder of the Maria Dowling Salon in Dubai.
It’s easier to go grey from a lighter colour, so you may want to do that first. And this is the time to try a shorter style, she advises. Then a stylist can introduce highlights, start lightening up the roots, and let it fade out. Once it’s entirely grey, a purple shampoo will prevent yellowing.
“Get professional help – there’s no other way to go around it,” she says. “And don’t just let it grow out because that looks really bad. Put effort into it: properly condition, straighten, get regular trims, make sure it’s glossy.”
The specs
Engine: 2-litre or 3-litre 4Motion all-wheel-drive Power: 250Nm (2-litre); 340 (3-litre) Torque: 450Nm Transmission: 8-speed automatic Starting price: From Dh212,000 On sale: Now
The Birkin bag is made by Hermès.
It is named after actress and singer Jane Birkin
Noone from Hermès will go on record to say how much a new Birkin costs, how long one would have to wait to get one, and how many bags are actually made each year.
More on Quran memorisation:
Mohammed bin Zayed Majlis
What sanctions would be reimposed?
Under ‘snapback’, measures imposed on Iran by the UN Security Council in six resolutions would be restored, including:
- An arms embargo
- A ban on uranium enrichment and reprocessing
- A ban on launches and other activities with ballistic missiles capable of delivering nuclear weapons, as well as ballistic missile technology transfer and technical assistance
- A targeted global asset freeze and travel ban on Iranian individuals and entities
- Authorisation for countries to inspect Iran Air Cargo and Islamic Republic of Iran Shipping Lines cargoes for banned goods
Thank You for Banking with Us
Director: Laila Abbas
Starring: Yasmine Al Massri, Clara Khoury, Kamel El Basha, Ashraf Barhoum
Rating: 4/5
Why are asylum seekers being housed in hotels?
The number of asylum applications in the UK has reached a new record high, driven by those illegally entering the country in small boats crossing the English Channel.
A total of 111,084 people applied for asylum in the UK in the year to June 2025, the highest number for any 12-month period since current records began in 2001.
Asylum seekers and their families can be housed in temporary accommodation while their claim is assessed.
The Home Office provides the accommodation, meaning asylum seekers cannot choose where they live.
When there is not enough housing, the Home Office can move people to hotels or large sites like former military bases.
The specs: 2018 Opel Mokka X
Price, as tested: Dh84,000
Engine: 1.4L, four-cylinder turbo
Transmission: Six-speed auto
Power: 142hp at 4,900rpm
Torque: 200Nm at 1,850rpm
Fuel economy, combined: 6.5L / 100km
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
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The biog
Favourite book: Animal Farm by George Orwell
Favourite music: Classical
Hobbies: Reading and writing
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
More from Neighbourhood Watch:
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
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Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
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Second ODI
England 322-7 (50 ovs)
India 236 (50 ovs)
England win by 86 runs
Next match: Tuesday, July 17, Headingley
BIGGEST CYBER SECURITY INCIDENTS IN RECENT TIMES
SolarWinds supply chain attack: Came to light in December 2020 but had taken root for several months, compromising major tech companies, governments and its entities
Microsoft Exchange server exploitation: March 2021; attackers used a vulnerability to steal emails
Kaseya attack: July 2021; ransomware hit perpetrated REvil, resulting in severe downtime for more than 1,000 companies
Log4j breach: December 2021; attackers exploited the Java-written code to inflitrate businesses and governments
Pharaoh's curse
British aristocrat Lord Carnarvon, who funded the expedition to find the Tutankhamun tomb, died in a Cairo hotel four months after the crypt was opened.
He had been in poor health for many years after a car crash, and a mosquito bite made worse by a shaving cut led to blood poisoning and pneumonia.
Reports at the time said Lord Carnarvon suffered from “pain as the inflammation affected the nasal passages and eyes”.
Decades later, scientists contended he had died of aspergillosis after inhaling spores of the fungus aspergillus in the tomb, which can lie dormant for months. The fact several others who entered were also found dead withiin a short time led to the myth of the curse.
UAE currency: the story behind the money in your pockets
More on Yemen's civil war
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