- The 22 million US jobs that were lost during the COVID-19 pandemic in the spring won’t be regained until early 2024, according to the chief economist at Moody’s Analytics, part of ratings giant Moody’s.
- Mark Zandi said the industries that have been hit hardest in the pandemic include, retail, leisure, hospitality and recreational activities.
- Tens of thousands of small retailers have failed or filed for bankruptcy “while the retail behemoths gobbled up market share,” he said.
- “Economic growth should kick into a higher gear, at least for a while,” he said, referring to pent-up demand once “consumers let loose later in 2021 once they’re vaccinated.”
- Ryan Sweet, a research economist at Moody’s, told Business Insider: “The labor market will heal but that takes time, particularly for those segments that were most significantly hurt by the pandemic.”
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The 22 million jobs that were lost in the US during the early months of the COVID-19 pandemic won’t be regained until early 2024, according to Moody’s Analytics’ chief economist.
The coronavirus pandemic has ravaged the US job sector: Nearly 69 million filings for unemployment benefits have been made since the pandemic slammed the US economy in March. Continuing claims, which track Americans receiving unemployment benefits, fell to 6.1 million for the week that ended November 14.
Mark Zandi said in a November 29 note from the analytics company, part of ratings giant Moody’s, that it was “expected to take until early 2024 — nearly four years after the pandemic struck — for the economy to regain the 22 million jobs lost in March and April 2020.”
“The jobs recovery from the pandemic will be much slower than that of GDP,” he said. US GDP surged about 33% in the third quarter.
Zandi said the industries that have suffered most from the pandemic include, retail, leisure, hospitality and recreational activities. Smaller companies have lost out to bigger competitors, particularly in retail, he said.
“Tens of thousands of mom-and-pop retailers have failed and midsize publicly traded retailers have filed for bankruptcy, while the retail behemoths gobbled up market share,” Zandi said.
The “biggest winners” are in more productive industries such as technology, wholesaling, and professional services that have “taken advantage of the pandemic,” he said.
These businesses have “deployed technologies and processed changes that they were investing in but reluctant to take full advantage of during the good times,” he added.
He said that pent-up demand will be unleashed as households “let loose later in 2021 once they’re vaccinated” and start to spend on activities they were unable to do while self-quarantine.
“As of October, households had saved nearly $1.4 trillion more because of the pandemic than they would have typically, amounting to approximately 6 percentage points of pre-pandemic GDP,” said Zandi.
Moody’s chief economist concluded the article saying, “The COVID-19 pandemic is sure to have a long tail. Hopefully, not entirely a dark one.”
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The number of filings for US unemployment for the week that ended Saturday rose to 778,000, the Labor Department said November 23. This was more than what economists forecasted, which suggests the US labor market is struggling.
The total number of jobs in the US is still more than 10 million below its peak, Axios reported Wednesday.
Ryan Sweet, a research economist at Moody’s, told Business Insider: “The US labor market is losing momentum as the initial phase of the recovery has mostly run its course and the next phase will be more difficult.”
Whereas the first bounce in employment was triggered by recalled workers, the next stage of labor recovery will be driven by the underlying strength of the economy, according to Sweet.
“The labor market will heal but that takes time, particularly for those segments that were most significantly hurt by the pandemic,” he said.
In an online survey of 13,200 people in August, Pew Research Center, a nonpartisan think tank, found that half of American adults that lost a job due to the COVID-19 crisis haven’t returned to work.