The U.S. jobs market will recover more slowly than the GDP, according to the consensus among 63 economists the Wall Street Journal surveyed in early October.
“We’re substituting away from labor-intensive services,” said economist Leo Feler at the University of California at Los Angeles.
The group expects the U.S. economy to contract 3.6 percent this year, grow 3.7 percent next year, and 3.0 percent in 2022.
More than half of those surveyed said they did not expect the jobs market to regain pre-pandemic levels until at least 2023, a longer period than the group had foreseen in an April survey, when most predicted a return to 2019 employment levels by the second quarter of 2022.
In the most recent survey, 42.9 percent saw jobs fully returning in 2023, while 12.2 percent it thought would take even longer.
Many states are easing lockdowns more slowly or cautiously than hoped. Also, in-person businesses, such as restaurants and retail, can operate only at limited capacities or are waiting for consumers to feel confident enough to return.
“The slowing momentum in the labor market bodes poorly for the broader recovery and points to increasing scarring effects from the crisis,” said Gregory Daco, Chief U.S. Economist at Oxford Economics.
In September, the economy supported 11 million fewer jobs than in February.
In recent weeks, a growing number of temporary furloughs have become permanent, slowing the recovery of the overall economy as well as the jobs market, especially in the hard-hit labor and service sectors.
“The damage to service-sector employment will be long-lasting and many will face long durations of unemployment that will delay the return to February 2020 levels,” said Joseph Brusuelas, Chief Economist at RSM US.
This year’s election is creating more uncertainty for the financial markets than previous ones, according to 80 percent of the economists in the survey, with 73.2 percent saying the election is creating greater uncertainty for the economy overall.
“If we get more aid and stimulus, we could mitigate virus-related losses and have a stronger recovery,” said Diane Swonk, at Grant Thornton. “If not, all bets are off and downside risks dominate.”
TRENDPOST: As we have been reporting, while poverty rates rise and the middle class shrinks, the rich are getting richer while the majority of populations grow poorer.
Thus, across the globe, there will be an acceleration of demonstrations as workers of the world unite to protest against poverty, corruption, violence, and crime. This will in turn escalate a migrant crisis as millions flee for safer havens, and it will be a foundation for new anti-establishment political parties.
