Borneo Bulletin Digital

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SUNDAY, MAY 10, 2020 12 Business
A person sits near a boarded up and closed Arc’teryx outdoor clothing store in downtown Seattle. PHOTO: AP
WASHINGTON (AP) — The
coronavirus crisis has sent United
States (US) unemployment surging
to 14.7 per cent, a level last seen
when the country was in the throes
of the Depression and President
Franklin D Roosevelt was assuring
Americans that the only thing to
fear was fear itself.
And because of government
errors and the particular way the
Labour Department measures the
job market, the true picture is even
worse. By some calculations, the
unemployment rate stands at 23.6
per cent, not far from the Depression
peak of nearly 25 per cent.
The Labour Department said on
Friday that 20.5million jobs vanished
in April in the worst monthly loss on
record, triggered by coast-to-coast
shutdowns of factories, stores, of-
“ices and other businesses.
The breathtaking collapse is
certain to intensify the push-pull
across the US over how and when to
ease stay-at-home restrictions. And
it robs US President Donald Trump
of the ability to point to a strong
economy as he runs for re-election.
“The jobs report from hell is
here,” said Senior Economist at
BMO Capital Markets Sal Guatieri,
“one never seen before and un-
likely to be seen again barring an-
other pandemic or meteor hitting
the Earth.”
On Wall Street, stocks pushed
higher as investors reckoned that
the worst of the job losses are over.
The Dow Jones Industrial Average
gained more than 455 points, or
close to two per cent.
Worldwide, the virus has
infected at least 3.9 million
people and killed over 276,000,
including more than 77,000 in
the US, according to a tally by
Johns Hopkins University based on
of“icial data. White House of“icials
announced that Vice President Mike
Pence’s press secretary has the
coronavirus, the second person at
the complex known to test positive
this week, and said safety protocols
were being stepped up.
The unemployment report
indicated that the vast majority of
those laid off in April — roughly 75
per cent — consider their job loss
temporary, a result of businesses
that were forced to close
suddenly but hope to reopen and
recall staffers.
Whether most of those workers
can return anytime soon, though,
will be determined by how well
policymakers, businesses and the
public deal with the health crisis.
Economists worry it will take years
to recover all the jobs lost.
The meltdown has occurred
with startling speed. In February,
unemployment was at a more than
50-year low of 3.5 per cent, and
the economy had added jobs every
month for a record nine-and-a-half
years. In March, unemployment
was 4.4 per cent.
“In just two months the
unemployment rate has gone
from the lowest rate in 50 years
to the highest rate in almost 90
years,” said Chief Economist at PNC
Financial Gus Faucher.
Nearly all the job growth
achievedduringthe11-yearrecovery
from the “inancial meltdown has
now been lost in one month.
Leslie Calhoun lost his job
cleaning Atlantic City, New Jersey,
casinos after 20 years. He, his wife,
their two daughters and his sister-
in-law are surviving on his wife’s
paycheque fromamedical facility as
he wrestles with an unemployment
system that has paid him nothing
since he applied in March.
“The bills are piling up,” he said.
“We’re eating a lot of ramen noodles
and hot dogs. What I wouldn’t give
for a nice meal of baked chicken
and steak, some fresh vegetables.”
The last time unemployment
was this high was in 1939 at the tail
end of the Depression, before the
US entered World War II.
Trump, who faces the prospect
of high unemployment rates
through the November election,
said the “igures were “no surprise”
and later added that he’s in “no
rush” to negotiate another “inancial
rescue bill.
An emerging Democratic aid
package is expected to include
eye-popping sums, centred on
nearly USD1 trillion that states and
cities are seeking to prevent mass
layoffs as governments reel from
the one-two punch of skyrocketing
pandemic costs and dismal tax
receipts in the shuttered economy.
The nonpartisan Congressional
Budget Of“ice has projected that
the jobless rate will still be 9.5 per
cent by the end of 2021.
As bad as Friday’s numbers
were, they don’t capture the full
magnitude of the devastation.
In a sort of footnote, the Labour
Department acknowledged that its
US unemployment surges to a Depression-era
level of 14.7pc
survey-takers erroneously classi“ied
millions of Americans as employed
inApril even though their employers
had closed down. If they had been
counted correctly, unemployment
would have been nearly 20 per
cent, the government said.
However, the Labour
Department doesn’t change the
results submitted by its survey-
takers because that could be seen
as political manipulation.
Also, people who are out of
work but aren’t actually looking for
a new job are not of“icially counted
as unemployed. An estimated 6.4
million people “it that description
last month, probably because they
saw little prospect of “inding work
given the shutdowns.
Counting them as unemployed
would push the rate up further,
to almost 24 per cent, accord-
ing to calculations by Economist
Heidi Shierholz at the Economic
Policy Institute.
Though some businesses are
beginning to reopen in certain
states, factories, hotels, restaurants,
resorts, sporting venues, movie
theatres andmany small businesses
are still largely shuttered. The
government is dispensing nearly
USD3 trillion to help households
and businesses pull through,
including USD1,200-per-person
relief checks and an extra USD600
in weekly unemployment bene“its.
Trump has pushed aggressively
to get businesses up and running
again amid warnings from health
experts that easing up too soon
could lead to a deadly second wave
of infections.
Critics of the coronavirus
response have included Dr Rick
Bright, who was ousted from a
government research agency after
raising concerns over use of an
unproven drug that Trump touted
as a remedy for COVID¢19. Federal
investigators found “reasonable
grounds” that he was punished
for speaking out and should be
reinstated, his lawyers said.
As Election Day nears, the
president will be judged on how
he handles not just the economic
crisis but the health one.
Just months ago, the Trump
campaign planned to hammer its
Democratic opponent this spring
with negative ads while touting
the strong economy. But since the
outbreak, the re-election team has
grown increasingly worried about
Trump’s standing in key states such
as Michigan, Wisconsin and Florida.
More than one-“ifth of Michigan’s
workers are on unemployment.
Former Vice President Joe
Biden, meanwhile, has seized on the
crisis as part of his overall attempt
to cast Trump as caring only about
the wealthiest Americans.
In Europe, this week the
Bank of England projected that
Britain will see its biggest annual
economic decline since 1706.
Unemployment in the 19-country
eurozone is expected to surpass
10 per cent in coming months
as more people are laid off. That
“igure is expected to remain lower
than the US rate, in part because
millions of workers in places
such as France and Germany are
staying on payrolls with the help
of government aid that covers
much of their salaries.
Over the past seven weeks, an
estimated 33.5 million Americans
have “iled for unemployment
bene“its. Friday’s job-loss report
is based on a mid-April survey of
businesses and households and
takes into account the hiring surge
at companies like Amazon and
many grocery stores.
Minorities and poor people
have suffered the most from
the shutdown. Job losses were
especially severe among Latinos,
whose unemployment rate leaped
to 18.9 per cent from six per cent in
March. The African-American rate
jumped to 16.7 per cent, while for
whites it rose to 14.2 per cent.
SHANGHAI (XINHUA) - Interna-
tional hospitality groups are grad-
ually resuming full operations in
China as the country has entered
the phase of regular epidemic
prevention and control.
As of Friday, all of Hilton’s
250 hotels in China’s mainland
have resumed business, said
Area President for Hilton Greater
China and Mongolia Qian Jin
adding that there were 150
Hilton hotels temperately closed
to new bookings during the
COVID¢19 outbreak.
“Reopening all our hotels in the
Chinesemainland is the “irst step in a
measured global recovery process,”
said President and CEO of Hilton
Chris Nassetta. “We are con“ident
that there are brighter days ahead.”
Over 98 per cent of over 470
hotels of InterContinental Hotels
Group PLC (IHG) in China had been
in operations since May 5, even
though nearly one-third of them
were once temporarily closed due
to the epidemic, according to Chief
Executive Of“icer of IHG Greater
China Jolyon Bulley, adding that
hotels in the pipeline have also re-
sumed construction work.
“China is IHG’s second-largest
market and the fastest growing one.
We’re con“ident of the long-term
outlook of China’s hospitality indus-
try,” he said.
According to Bulley, the de-
velopment of urbanisation, in-
creasing disposable income of
residents, and the improvement
of tourism infrastructure and oth-
er factors will promote the con-
tinuous growth of China’s hotel
market demand.
International hotel groups gradually resume full operations in China