As of July, 2020 the unemployment rate fell to 11.1%. The U.S. unemployment rate is at...

As of July, 2020 the unemployment rate fell to 11.1%. The U.S. unemployment rate is at its lowest level in months and the economy added a record number of jobs in June. How do you interpret this rate? identify the national unemployment rate. How do you interpret this rate? Identify at least two changes to the Unemployment Insurance Policy that were instituted in March 2020 in response to the COVID-19 crisis. What might be some of the short-term and long-term consequences of this change.

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Expert Solution

Because of current pandemic many global economies are facing twin shocks of Demand Shock and Supply Shock. Unemployment has increased sharply and globally almost billions of people are impacted. In many countries the unemployment has increased many fold.

- Below chart explains that the unemployment rate in US due to corona pandemic and crisis shoot up to over 15% appx in the month of April.

- However as the economy has opened up since May , the unemployment rate has started coming down.

- Unemployment rate of 11%in June is very good as compared to high of 15% in April

- Because of COVID-19, Congress as of late established the Families First Coronavirus Response Act ("FFCRA") and Coronavirus, Aid, Relief, and Economic Security Act (CARES) as a defensive measure against this emergency, including fundamental help to the two businesses and workers.

- Short term impact of this was that it gave benefits to unemployed so that they can have food and shelter and basic necessities. However its long term impact will be devastating if it continues because the people will have less incentive to work and also the benefits will increase the deficit for the government.

Rahul Sunny answered 1 year ago

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