The number of jobs lost in Louisiana amid the coronavirus pandemic is now nearly double what occurred when Hurricane Katrina devastated the state 15 years ago.
Louisiana’s job loss was at 11 percent in the first half of the year as coronavirus started ravaging the United States.
In comparison, the rate was six percent in the wake of Hurricane Katrina back in 2005. Quarterly jobs losses for Louisiana during the entire 2008 Great Recession were less than four percent.
An economic forecast by Gary Wagner, a professor at the University of Louisiana at Lafayette, predicts that it could take until 2022 for the state’s economy to fully recovery from COVID-19.
Wagner, who released his forecasts quarterly, noted that the state lost 218,000 payroll jobs in the first half of the year and the official unemployment rate was at 13 percent by the end of the second quarter – a high not seen since 1986.
More than 800,000 people had also lodged new unemployment claims since March 14, which in excess of the state’s historical average.
He expects year-over-year job growth to remain negative until the first quarter of next year.
‘Under the baseline scenario, the state is expected to have 1.9 million jobs at the end of 2021, or about 84,000 fewer jobs than in 2019,’ he said.
The state’s economy contracted at an annual rate of 6.6 percent in the first quarter, Wagner wrote in his report.
‘Louisiana’s contraction of 6.6 percent was one of the sharpest drops in the nation,’ he said.
‘Only Michigan, New York, Nevada and Hawaii experienced larger downturns in economic activity.’
Wagner, however, predicts Louisiana’s economy will bounce back quicker than initially expected.
‘As bad as some of the numbers we had between the first and second quarters, turns out that a lot of those indicators were a little better than what I was projecting back in May,’ he said.
‘I think one of the reasons was the additional unemployment benefits. That really helped to boost consumer spending.
‘At the time of the previous report, there was some uncertainty about how long that would last. We now know it’s going to continue to the end of 2020.’
The number of Americans filing a new claim for unemployment benefits rose unexpectedly back above the 1 million mark last week following an initial decline – a setback for a struggling US job market crippled by the coronavirus pandemic.
New claims for state unemployment benefits rose to 1.1 million for the week ended August 15, up from 971,000 in the prior week, the Labor Department said on Thursday.
The latest figures suggest that more than five months after the viral outbreak erupted the economy is still weak, despite recent gains as some businesses reopen and some sectors like housing and manufacturing have rebounded.
Economists had forecast a decline with only 925,000 applications in the latest week.
The previous week’s level had marked the first time since March that new claims had registered below the 1 million level.
First-time claims peaked at a record 6.867 million in late March.
Thursday’s claims report also showed the number of people receiving benefits after an initial week of aid dropped to 14.8 million in the week ending August 8 from a revised 15.48 million in the prior week.
The US economy has regained only 9.3 million of the 22 million jobs lost between February and April.
The continuing stream of layoffs comes against the backdrop of a modest recovery from a deep recession and a virus that is still paralyzing much of the economy.
Home construction, sales and auto purchases have bounced back. But spending on travel, entertainment and many other services remains weak. Small businesses are struggling and unemployment, at 10.2 percent, remains elevated.
A rising number of people who have lost jobs amid the pandemic say they consider their loss to be permanent.
Those recipients who are receiving unemployment on an ongoing basis are now getting far less aid because a $600-a-week federal benefit has expired, which means the unemployed must now get by solely on much smaller aid from their states.
The loss of the federal benefit has deepened the struggles for many, including a higher risk of eviction from their homes.
The extra $600 a week unemployment benefit provided by the federal government lapsed on July 31.
While President Donald Trump has signed an executive order that includes a provision extending the supplement at a reduced rate of $400 a week, there has been confusion over its implementation.