The employment rate is no longer a good metric to describe what we are experiencing. It’s 2021, we are supposed to be at the start of a major retail and consumer recovery, with stimulus on its way. But something’s wrong.
The January jobs report shows high rates of long-term unemployment, which is a period of joblessness lasting at least six months. It’s not just that long-term unemployment is close to a Great Recession record, it’s that the labor participating rate keeps falling during the pandemic.
Almost 40% of jobless workers are long-term unemployed, the Bureau of Labor Statistics reported Friday, nearing the record 46% set following the Great Recession. The U.S is mostly just a consumer driven economy, but the Fed printing money and stimulus checks don’t work forever. This is especially true if the pandemic’s end is not the end with the 1st generation of vaccines.
In Canada the shutdown of the 2nd wave has also caused a shock. COVID-19 restrictions took another devastating toll on Canada’s job market in January, as a far worse than expected 213,000 jobs were shed instead of the 40,000 economists expected. So what?
Long term employment is decreasing and it could be somewhat permanent. In the U.S. they talk about 10 million jobs not coming back and 1 in 3 small businesses shutting down for good. But even that’s not the entire story. Almost 40% of jobless workers in January were long-term unemployed, the Bureau of Labor Statistics reported Friday.
The Labor Department reported Friday that employers added a meagre 49,000 jobs in January, after having slashed 227,000 in December, which did nothing to brighten that picture. Still, the unemployment rate slid to 6.3%, its lowest level since March, from 6.7% in December. Not exactly the story we were told to expect.
It would take approximately 29 years to get back to pre-recession levels at the current pace of job growth, according to Heidi Shierholz, director of Policy at the Economic Policy Institute, a left-leaning think tank.
(Her analysis uses the average growth over the past three months.) So this might be it for this generation. It’s their 2008 as we had for GenX. This is the turn of Millennials and GenZ.
There will be no miracle comeback with Covid-19 variants on the loose.
The U.S. is distributing vaccines to beat back the coronavirus and Democrats are aiming to infuse $1.9 trillion of spending into the economy. They will pretend everything will be okay, but economists and health professionals know the real story.
All told, the United States still has 9.9 million fewer jobs than it did in February last year, just before the coronavirus erupted across the country. What happens if the pandemic really gets most deadly at the end of 2021 with a better more dangerous Covid-19 virus that’s adapted to us? That’s the real story here. That’s where the real economy will be seen.
Check out the official labor participation levels here. Countless women in their prime have dropped out of the labor force. Do you see a big rebound? I don’t. With the health crisis not over, it’s not likely to improve in months, perhaps years.
The economy lost 9.3 million jobs in 2020, according to revised government data. How many jobs will be lost in 2021 and 2022? What will that do to society?
As the labor participation rate drops and long-term unemployment increases, the Last Futurist predicts we’ll beat the record of the Great Recession sometime in early 2022. The labor participation rate will likely dip below 61% in 2022 when the 3rd wave begins. We talked about food shortages in 2020.
What will we see in 2021 or 2022? The stock market will be inversely correlated with the pandemic due to Fed and Government stimulus, low interest rates and more choosing to put their financial power into equities.