US unemployment in a pandemic
On the last day before the Easter weekend, the American market showed limited optimism.
US indices rose on the news of a new phase of government support for business. On Thursday, April 9, Fed Chairman Jerome Powell announced an additional support package of $ 2.3. trillion, promising to continue to act “decisively, pro-actively, aggressively.”
Now the Fed’s vector of efforts is shifting to support the level of employment, as well as mitigate the negative effects of the galloping growth of unemployment. This week alone, 6.6 million Americans filed initial jobless claims. And over the past 3 weeks, the number of applications amounted to 16.7 million. At the same time, this indicator does not fully reflect the state of affairs in the labor market, since the system for receiving applications is overloaded.
To help reduce the growth rate of unemployment, the Fed sends $ 2.3 trillion in loans in three areas:
- Small and medium-sized businesses, to maintain the staff
- Directly to households
- Cities and counties through purchases of their short-term bills.
News of support measures overpowered the negative growth rate of unemployment; by the end of Thursday, the SP500 index grew by 1.5% (+ 12.1% for the week), NASDAQ by 0.8% (+ 10.6% for the week). The VIX “fear index” decreased by 3.88%, having lost 5.66% during the week, while remaining at a high level (41.7).
Markets are still volatile, but investors pin their hopes on the fact that the epidemic seems to be moving in a controlled direction, and the peak of new cases of COVID-19 infection is already over or about to be passed. On Friday morning, a little more than 1.6 million cases of infection from the beginning of the epidemic (+84.2 thousand per day) were recorded around the world, and the world peak of incidence was noted on April 4. This, however, so far applies to a lesser extent to the USA – there the peak of incidence is still ahead.