The COVID-19 pandemic led to millions of job losses all around the world. Now, while many reports suggest the global economy is on its path to recovery, a recent note from Moody’s says that the U.S. alone won’t regain the jobs that were lost during the early months of the pandemic till four years!
According to the Chief Economist Mark Zandi of Moody’s Analytics, close to 22 million U.S. jobs which were lost during March and April would not be regained before the year 2024.
In the United States, since March itself when COVID-19 started spreading like wildfire in the country, nearly 69 million filings were observed for unemployment benefits. However, out of them only 6.1 million reported having actually received the benefits for the week ended November 14th.
Zandi said that the recovery of the U.S. GDP wouldn’t co-relate with the job recovery rate as the later it is expected to be extremely slow-paced. In Q3, U.S. GDP surged close to 33%.
The chief economist of the analytics firm highlighted that the most suffered industries from the pandemic included retail, leisure, hospitality and recreational activities with smaller companies losing out to bigger competitors, particularly in retail.
The sectors which came out victorious during these tough times are technology, wholesaling, and professional services as in their case it was seen that the pandemic further helped them boost their business, he said.
Businesses in the domains, as mentioned above, deployed several changes in their business processes. They deployed the use of effective technologies, something they wouldn’t have invested into if the pandemic didn’t force them to so.
Zandi also mentioned that because of the lockdowns and self-quarantine, U.S. households didn’t spend on leisurely activities which helped them save up nearly $1.4 trillion more than they typically would under normal circumstances.
But, as far as employment is concerned things are still looking bad. According to the Labour Department, the number of U.S. unemployment filing numbers for the week ended Saturday rose to a whopping 778,000 which is more than what economists forecasted—thus hinting at the fact that the U.S. labour market is struggling quite heavily.
According to another media report, the total number of jobs in the United States is still more than 10 million below its typical peak. Ryan Sweet, another research economist at Moody’s, mentioned that the U.S. labour market is being observed to be losing its momentum. This is because the initial phase of the recovery has already run its course, and, as we advance, the next phase will be even more difficult.
The scenario in India is no different either. The former chairperson of the Centre for Labour Studies at the Jawaharlal Nehru University, in a statement, mentioned that India should not expect job recovery to pre-pandemic levels until at least 2023-24.
He further mentioned that the devastating effect that the pandemic brought to India made its already sluggish economy only worse and tipped it towards the downside.
Despite the facts that Indian companies are leaving no stone unturned to capitalise on the exploded adoption of internet and smartphone, the things are coming back to normal at a very slow space. Besides, the fear of multiple waves of Covid19 and availability of Vaccine to masses not before the second half of 2021 has jeopardised the offline market conditions. The distress sale of Future Group and many other companies which are effected the worse due to pandemic is a clear sign that the struggle for the retail market – which plays a vital role in the nation’s employment scenario – will continue in 2021 as well. All of it will have an adverse effect on the recovery of jobs lost during 2020.
What are your thoughts about the COVID-effect on the global unemployment scenario? Let us know in the comments down below. We will keep you updated on all future developments. Until then, stay tuned.