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U.S. layoffs surge amid coronavirus shut down

Video Credit: Reuters Studio - Duration: 01:45s - Published
U.S. layoffs surge amid coronavirus shut down

U.S. layoffs surge amid coronavirus shut down

Weekly unemployment claims surged to a 2-1/2 year high as companies laid off workers because of the coronavirus pandemic that has frozen economic activity.

Conway G.

Gittens has more.

America is getting the first glimpse of how the coronavirus pandemic is impacting the labor market.

With business shuttered and Americans hunkering down - first-time claims for unemployment benefits surged last week to a 2-1/2 year high, according to data released Thursday from the Labor Department.

Jobless claims rose more than expected to 281,000.

That's a jump of 70,000 in just one week.

And that's just the beginning.

With the service economy grounded to a halt: we're talking travel and tourism, restaurants, sporting events and so many others businesses, unemployment claims are expected to surge.

Goldman Sachs predicts the national unemployment rate will top 5 percent by year's end.

Others worry it will be much higher than that.

The restaurant industry alone could shed as many as 7 million workers, an industry trade group warned the White House and Congress in a letter earlier this week.

Other sectors are also feeling the pinch.

With oil prices plummeting by more than half to lows not seen in two decades, the job losses are piling up in the energy sector.

There have already been thousands of layoffs and Halliburton this week announced it will furlough 3500 employees for 60 days to save cash.

On average, North American oil and gas producers have already slashed capital spending by about 30 percent, according to data compiled by Reuters.

Less spending and a drop in output means fewer workers will be needed.

The White House is trying to soften the blow to workers and industries with a $1 trillion economic stimulus plan, but investors are worried that might not be enough to stop the economy from sliding into a painful recession.




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