ANALYST SAYS A U.S. JOB BOOM IS IN THE OFFING
Gad Levanon, head of The Conference Board's Labor Market Institute, has predicted a job boom this year premised on a strong economic recovery during the second semester of 2021.
Writing for CNN Business Perspectives, Levanon’s prediction contradicts that of economists who said it will take years for the unemployment rate to go back up. “The US economy and labor market, still far from fully recovered, are now bracing for a terrible, virus-spreading winter. It is hard to feel optimistic, but help is on the way. A strong recovery in the second half of 2021 may lead the unemployment rate to return to its natural rate of about 4.2 to 4.5% in 2022.”
Levanon stressed that while the outlook for the winter is bleak, the US labor market should get much stronger in the second half of 2021, mostly because of the impact of the vaccination campaign.
According to some estimates, by August or September, the United States could reach herd immunity, preceded by very low rates of new infections in late spring. Herd immunity means that a large enough percentage of a population, 70% to 90%, has become immune to COVID-19, thereby reducing the likelihood of infection for people who lack immunity.
This would allow local governments' social distancing policies to become less stringent and the economy to recover as consumers feel more comfortable engaging in in-person services.
He stressed that in the second half of 2021, a strong US economic recovery is likely to take place, with economic activity is likely to be about 5% above the first half of the year, according to The Conference Board.
The recovery will be especially strong in the hardest-hit industries, where employment levels are still very depressed compared with pre-pandemic levels.
“We cannot expect a full employment recovery in early 2022, because automation and corporate reorganizations permanently eliminated many jobs. But barring a major slowdown in the vaccination campaign, I project that 3.5 to 5 million new jobs should be created in the United States by the first quarter of 2022,” Levanon concluded.
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