Slow start, though LaborIQ® forecasts economic acceleration in second half of 2021
ThinkWhy, a SaaS company helping businesses navigate the labor market, released its national jobs report following an announcement from the Bureau of Labor Statistics that the economy lost 140,000 jobs in December, with the unemployment rate at 6.7 percent.
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“LaborIQ® by ThinkWhy still expects job growth to accelerate in 2021, but December’s numbers confirm that any improvement will be sluggish as 2021 begins. The pace of vaccinations will continue to impact how fast the economy can recover”
Job growth plummeted with 140,000 jobs lost in December, falling below the pace of employment growth experienced prior to COVID-19. The pandemic’s strain on the recovery of jobs was much more obvious in the Bureau of Labor Statistic’s latest report on the labor market. In the 12 months leading up to the pandemic, an average of 194,000 jobs were gained per month at the national level. Not only did job growth fall below that number, but it turned substantially negative. The 140,000 jobs lost in December 2020 was a clear indication that, until the virus is contained, there is a ceiling on the number of jobs that can be added back to the economy.
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“LaborIQ® by ThinkWhy still expects job growth to accelerate in 2021, but December’s numbers confirm that any improvement will be sluggish as 2021 begins. The pace of vaccinations will continue to impact how fast the economy can recover,” said Jay Denton, Chief Innovation Officer and SVP of Business Intelligence for ThinkWhy.
Looking to the future, the U.S. still has 9.8 million jobs to recover from their levels before the pandemic. LaborIQ® by ThinkWhy projects that jobs will not be fully recouped until early 2023. The biggest storylines to watch through early 2021 are:
- Timing, efficacy and number of people who will get a vaccine
- Impacts to industries and locations based on tightening social restrictions to contain the virus, especially if the new strain spreads rapidly
- Policies from the new administration to keep businesses and consumers afloat