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Eurozone Faces 15% Decline while USA Unemployment Continues to Soar

The economic crisis provoked by the coronavirus outbreak continues to wreak havoc all over the planet. In the latest news, the European economy and the American employment figures are both heavily affected.

The Eurozone Recession

It has been confirmed that both France and Italy have plunged into recession, with the former suffering its worst economic turmoil since World War Two. Indeed, the entire Eurozone is going through the heaviest recession in its history.

ECB president Christine Lagarde pointed out that the pandemic has had the effect of stopping economic activity all over the planet. She said that the full details of the economic impact are just starting to become clear.

Lagarde confirmed that their economists are now of the opinion that this quarter could see the Eurozone shrink by 15%. This would make it the region’s worst-ever peacetime recession. The annual contraction is currently estimated to reach between 5% and 12%.

The exact figure will come down to various factors, including the length of time that lockdowns are in place and the measures taken to look after businesses and workers. The fact that many companies are turning to a debt collection process should help them through this period too.

The speed of recovery is still uncertain at this time. It was also noted the GDP in the Eurozone was down by 3.8% from January to March, before the most drastic lockdown measures were fully in place in most European nations.

America Unemployment Numbers Keep on Rising

On the other side of the Atlantic, the record-breaking US employment figures keep on getting worse. In the last week, another 3.8 million Americans lost their jobs, more than the 3.5 million that had been predicted but less than the previous week’s 4.4 million.

This means that in the last 6 weeks over 30 million have joined the unemployed list. It is also worth noting that the pace of new claims has been declining in the last 4 weeks. The peak came with a weekly total of 6.8 million in the last week of March.

It has been confirmed that there is a huge backlog of people looking to sign on for jobless welfare benefits from the state. This means that the numbers are likely to continue to climb even higher as the applications are all finally counted.

Despite the slowing trend, it is still believed that unemployment rates across the country will soon see numbers of jobless that haven’t been recorded since the 1930s, when the Great Depression took hold.

Another result of the on-going crisis has been a dramatic drop in household spending across the US. In March, it fell by 7.5%, when a drop of 5.1% had been anticipated. Indeed, this is the largest decline since 1959, which is when the Commerce Department started keeping these numbers.

In these unprecedented times, it is difficult to look ahead and make predictions with any great certainty. Nevertheless, the most optimistic economists believe that the worst may have passed and that economies around the world will start to recover soon.