Weak demand is forcing U.S. employers to now lay off workers, keeping new applications for unemployment benefits extraordinarily high.
This move comes against the backdrop of businesses’ collective outlook that the COVID-19 pandemic could persist longer than expected.
A resurgence in confirmed coronavirus cases across the country, linked to the reopening of businesses, is also dimming the outlook.
Roughly 29 million people were collecting unemployment checks at the end of May.
The Labor Department’s weekly jobless claims report earlier in the week is unlikely to reveal much, albeit it is the timeliest data on the country’s economic performance.
It is now more than a month since many businesses resumed operation after closing in mid-March in an effort to slow the spread of the respiratory illness.
Companies are hiring, but others are cutting jobs at nearly the same pace.
According to bea.gov, “Real gross domestic product (GDP) decreased at an annual rate of 5.0 percent in the first quarter of 2020.”
It also stated that “The decline in the first-quarter GDP reflected the response to the spread of COVID-19, as governments issued “stay-at-home” orders in March. This led to rapid changes in demand, as businesses and schools switched to remote work or canceled operations, and consumers canceled, restricted, or redirected their spending.”
The economy slipped into recession in February.
Yvad Billings, Readers Bureau, Contributor
Edited by Jesus Chan
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