30.3 Million – The number of jobless claims made in the United States since the start of the Coronavirus Pandemic. It’s an astounding number, primarily when charted on a graph that shows weekly jobless reports since 1967.
The question arises – is the jarring rise in filings for unemployment consistent around the world?
United States’ jobless claims represent 18.41% of their labour force. This is on the back a total of 1.03 million confirmed Coronavirus cases or just under 33% of the confirmed cases in the world.
Relative to other countries, the US has had a muted and weak reaction towards the Coronavirus. Cases continue to pick up, with New York being the epicenter of the pandemic. The rhetoric out the Whitehouse has been of optimism for the future, as their deaths top 60,000. Jared Kushner, President Donald Trump’s senior adviser, touted the administration’s response to the Coronavirus as a “great success story.”
The Senate approved an unprecedented $2 Trillion Stimulus package, giving Americans and additional $1,200 to assist households as lockdowns continue.
Germany’s jobless, “Kurzarbeit” (short-time work subsidy) claims currently represent only 1.08% of their labour force. However, Hubertus Heil, the country’s labor minister, stated that there would be “many more” workers taking from the Kurzarbeit wage subsidies. Over 1.4m people received the funds during the peak of the global financial crisis of 2009.
Germany’s response to the Coronavirus has been strong. The extensive testing capacity of over 900,000 a week for a population of 83 million, strong leadership, and a robust public healthcare system all combine to a marvelous attempt in combatting the virus. Out of the 162k infected with the Coronavirus, around 6,500 have died, giving a fatality rate of just under 4%. This is in comparison with the United States fatality rate of 5.8%.
The Germany Government approved an $810B Stimulus package primarily to help all businesses maintain liquidity and keep employment throughout Germany. Alongside the short time work subsidy, Germany’s attempt to bolster the strength of business contrasts with the United States’ method of directly giving cash infusions to households.
The United Kingdom’s universal credit claims represent a 2.08% of the labour force. The scheme helps individuals are low on income or out of work.
The UK has been hit with criticism with their reaction to the Coronavirus, with Prime Minister Boris Johnson stating that he “shook hands with everybody” at a hospital including coronavirus patients. This was three weeks before he caught the Coronavirus. This casual attitude has skeptics wondering whether the government was doing enough to combat the virus and whether it is too little, too late with over 26.7k deaths representing a 15.8% mortality rate, the highest in the world.
The UK Government approved a $424b Stimulus package to help with household mortgages, airlines, retailers, and the hospitality industry.
Canada’s jobless claims reached 2.13 million, or 11% of their labour force.
Canada has shut down borders to who is not a citizen, a permanent resident, or a US citizen; however, the country is not in lockdown. Canada’s Prime Minister, Justin Trudeau, urged citizens to impose self-quarantine. This is on the back of 3,180 deaths, or just under a 6% fatality rate. As Canadian territories slowly loosen restrictions, it will be seen whether their relatively flexible reaction towards the Coronavirus will balance economic recovery and the safety of the population.
The government has pledged over $1.1T in support of Coronavirus related costs, half of which represents support to municipal governments for small businesses and households.
Officially, the number of unemployed citizens only represents 6.2% of the labour force (the labour force includes 290m migrant workers). However, an estimation by Liu Chenjie, chief economist at Upright Asset, stated that including migrant workers, the Coronavirus might have pushed 205 million workers into “frictional unemployment,” or 24.45% of the labour force.
Being ground zero for the Coronavirus, China implemented the first and strictest lockdown in Wuhan. With a population of 11 million, residents of Wuhan were the first to experience the suspension of public transport and roads, with stores that sell food and medicine remaining open. Fifty-nine days after the initial lockdown, Chinese authorities slowly lifted the lockdown but urged citizens to practice self-isolation when need be. China’s official numbers stand at 84,373 confirmed cases, with 4,643 deaths, representing a fatality rate of 5.5%.
There has been plenty of criticism regarding China’s response to the Coronavirus. From not allowing foreign scientists access in the country and access to essential data, the silencing, and death of Dr. Li Wenliang, the doctor who first spoke out about the Coronavirus to the world alongside skepticism with their official coronavirus figures. But as the first country to be hit with the effects of the Coronavirus, they are also the first country to emerge from the height of it. Krish Sankar, a Senior Research Analyst at Cowen, states that Apple’s supply chains in China are 90% operational, giving a sense of movement and productivity in the country.
China’s central bank, the Peoples Bank of China, has injected over $220B into the money markets to support liquidity and lending. However, the Chinese government has not issued any direct fiscal stimulus, unlike their western counterparts over concerns of inflation and increasing an already all-time high budget deficit.
It will be a while till we get a solid look at the toll the Coronavirus has had on the world. However, reliable data on the economic and societal damage of the Coronavirus may come to light in the next couple of months, possibly giving us a better prediction of how the world will move forward with regards to this devastating pandemic. With nations slowly creeping out of lockdown with cautious optimism, we may soon experience a seismic shift in how we go on with our daily lives. However, as the past has told us, we will emerge out of this crisis victorious.
Anish Lal, an Senior Analyst at Blackbull markets gives a technical overview on the historic SP500 gains closing a tumultuous month on the back of the US's historical unemployment claims number. Watch the video here: