The stock market struggles in the face of 1.5 million more Americans applying for unemployment
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The Guardian Reports: Stock markets tumble as another 1.5m Americans file for unemployment
While 1.5 million more Americans applied for unemployment benefits, the stock market began to take a dive.
As traders weighed the morning news for signs about how long the pandemic will sap global growth the major markets all turned negative, with the Dow Jones closing down over 1,800 points (7%) the S&P down 6% and the Nasdaq – which recently hit a record high – also losing 5%. In Europe all the markets closed down with the FTSE 100 in London losing 4%.
Within 3 months, more than 44 million Americans have applied for unemployment. Rehiring has picked up but the unemployment rate still remains incredibly high. Additionally, the US has passed more than 2 million COVID-19 cases.
Yesterday Jerome Powell, chair of the Federal Reserve, said the coronavirus was the “biggest economic shock” in living memory and warned it would be a long road to recovery. The central bank expects unemployment to dip to 9.3% by the year end, a sharp fall but still nearly three times as high at the 3.5% recorded in February. Powell warned that while the trend was positive it would be “difficult for many people to find work” for “an extended period”.
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