The purpose of this report is to discuss about the unemployment rate in United States of America in comparisons with the rest of the world. Unemployment rate refers to the percentage of unemployed people in an economy among people that are currently belonging to labor force. This is computed as unemployed people divided by total labor force and multiple by 100 wherein unemployed people are those that are presently not working but they are seeking work actively. According to Robert E. Hall in 1979, the theory of natural rate of unemployment is established around duration of employment. Most unemployed employees became unemployed because they are on temporary layoff, their previous jobs are about to end and these people have entered into labor force recently (Hall, 1979). This report is focused on unemployment levels in United States of America and in the rest of the world. While talking about unemployment levels in America, we can see that this rate has been increased sharply recently because of Covid-19. Similarly, other countries have also been impacted by Covid-19 and all financial indicators including employment levels have been disturbed or decreased because of coronavirus.
Unemployment Rate in America
The unemployment rate in United States of America has been increased to 14.7 % in April 2020. This rate is the highest in the history of previous years and as compared with market expectations of 16%. The Covid-19 crisis has been thrown millions of people out of their jobs. The number of unemployed people has been increased by 15.9 million to 23.1 million. In contrast, the number of employed people has been reduced by 22.4 million to 133.4 million. This is the lowest rate since January 1973 in this country as the labor force participation rate has been decreased by 2.5 % points throughout the months to 60.2 %.
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While talking about the previous years, we can see that unemployment rate in United States of America was reduced as compared with other countries. However, from 2008 to 2010 this was increased and in 2010 it was jumped to 9.25% but afterwards it was again lowered and back to the very good position. However, the same has also been increased to the upmost position that is 14.7 % in 2020. Therefore, we can see that the unemployment rate in United States of America was always in good position or in manageable levels but recently because of the negative impacts of corona virus this has been increased sharply in every country along with United States of America.
Another resource shows that before Covid-19the unemployment rate in United States very good and at a stable position as it was 3.5% in February 2020 and then it was getting increased and rose to 4.4% in March 2020. According to the Congressional Budget Office, it is expected that the unemployment rate in this country will be increased 10% in Q2 of 2020. However, while we talk about an average rate, we can see that from 1949 to 2019 the average rate of unemployment in United States is 5.8%.
Comparison with Rest of the World
Unemployment Rate in World Largest Economies in 2020
While talking about the unemployment rate in the world recently, we can select the most important countries so that their employment rate can be evaluated in contrast with America. It is clearly observed that all countries have been severely impacted by the negative impacts of Corona Virus and they are facing severe challenges in recent years. The rate of corona virus confirmed patients and rate of deaths in United States is getting increased year by year therefore the same has impacted the employment rate, economic growth and other indicators in this country severely.
Switzerland - 3.3% (April 2020); Japan - 2.5% (March 2020); Canada – 13% (April 2020); Germany - 3.5 (March 2020); United Kingdom - 3.9% (March 2020); Sweden - 8.2% (April 2020); Australia - 6.2% (April 2020); Norway - 3.6% (March 2020); France - 7.8% (March 2020); South Korea - 3.8% (April 2020); Saudi Arabia - 5.7% (December 2019); India - 7.8% (February 2020); Brazil - 12.2 (March 2020); Russia - 5.8 (April 2020); United Arab Emirates - 2.64% (December 2019).
Now, we have a look at the unemployed rate has been drastically increased in United States of America as compared with other countries. Although the Covid-19 pandemic has also impacted other countries severely and their unemployment rate has also been decreased significantly but still we can see that they are little bit at stable rate and has not been increased so much as increased in United States of America. In Russia this rate has been jumped to 5.8 and in India it has been jumped to 7.8. Similarly in United Arab Emirates the same was stood at 2.64 in December 2019 and in Saudi Arabia it was observed as 5.7 in December 2019. After United States of America, the Brazil and Canada have also faced severe unemployment as in Brazil it has been increased up to 12.2 in March 2020 and in Canada the same is 13 in April 2020.
Highest Unemployment Rate in 2019
Apart from these countries, there are many countries in the world as well wherein unemployment rate is very much high. According to the United Nations in 2019, the highest unemployment rates in 2019 were observed in occupied Palestine and in Sub-Saharan Africa ((CIA), 2020). In Lesotho this was noted as 28.2% and in Eswatini it was 26.5%. In Occupied Palestine territories it was observed as 26.4% and in Mozambique the same was 24.8% (Statistical Year Book, 2018).
Lowest Unemployment Rate in 2019
Now we are talking about the lowest unemployment rate in the year 2019 then the data has been taken from various government sources of respective countries. By taking this data the lowest unemployment rate was computed in 2019. In Qatar it was 0.1%, in Cambodia it was 0.3%. In Niger it was 0.4% and in Belarus the same was 0.5%. In Laos the same was 0.7% and in Myanmar it was 0.8%. In Bahrain it was 1.2%, in Tonga it was 1.2%, in Thailand it was 1.4% and in Kuwait the same was 2.0%. All these countries were having stunning unemployment rates ranged from 0.1% to 2.0% and these all overcome by United States by a significant margin in 2019.
Unemployment Rate in World’s Largest Economies in 2019
Now we are talking about the world’s largest economies and their unemployment rates in the year 2019. In Japan it was 2.4% and in India the same was 3.5 %. In Germany the same was 3.6% and in United Kingdom the same was 3.9%. In United States it was observed as 4.1% and in China it was 4.1%. In Canada the same was .8% and in France the same was 8.6%. In Italy it was 10.4 % and in Brazil the same was 11.6%. These numbers are showing major changes in coming months because the countries have absorbed the negative of Covid-19 (Statistical Year Book, 2018). The negative impacts of unemployment rates are changed as per our previous expectations based on the how many individuals are impacted ultimately and how severely the countries are hit by Covid-19 and how societal interventions are important to manage the spread of Covid-19 (Furnham, 2000). The United States are forecasted to face 10% unemployment rate by Q2 2020 and the Congressional Budget Office forecasts that the unemployment rate in United States will stand at 9% in the end of 2021 (Labor, 2021).
Conclusion
To conclude, we can see that unemployment rate is the most important financial indicators that are being used for assessing the economic growth of a countries and the economic performance shown by a country. The rate is compared with other countries as well so that meaningful evaluation can be done for various purposes. In this report, we have noted down about the unemployment levels in United States of America that is the super power and largest economy in the world. In United States of America, we can see that the unemployment rate was very low in previous years but currently, this rate has been increased sharply because of the negative effects of Covid-19. In order to further evaluate the unemployment levels, we have compared the unemployment levels of United States of America with rest of the world and it is concluded that other countries have also faced negative impacts of Covid-19, but the unemployment levels in United States have been increased more than other countries. Previously there were many other countries that were having lowest unemployment levels as compared with United States and similarly, in recent years the situation in United States of America is getting worse as compared with other countries in the world. We have used secondary sources for completing this study including published informed by many countries, journal articles and other reliable sources.
Bibliography
- (CIA), C. I. (2020). The World Factbook: Mozambique.
- Statistical Year Book. (2018). United Nations.
- Investopedia. (2020, apr 07). Retrieved may 27, 2020, from https://www.investopedia.com/: https://www.investopedia.com/articles/personal-finance/062315/unemployment-rates-country.asp
- Furnham, A. (2000). Work in 2020: Prognostications about the world of work 20 years into the millennium . Journal of Managerial Psychology, Volume 15 Issue 3.
- Hall, R. E. (1979). A theory of the natural unemployment rate and the duration of employment . Journal of Monetary Economics, Volume 5, Issue 2, Pages 153-169.
- Labor, U. B. (2021). Labor Force Statistics from the Current Population Survey. Unemployment Rate.
- britannica. (n.d.). Retrieved may 27, 2020, from https://www.britannica.com/: https://www.britannica.com/topic/unemployment-rate
- Trading economics. (n.d.). Retrieved may 27, 2020, from https://tradingeconomics.com/: https://tradingeconomics.com/united-states/unemployment-rate
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