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It will take a lot of time and work to continue the recovery.
In a weekend report, Goldman Sachs (GS) economist Joseph Briggs predicted the unemployment rate would drop to 6.6% by the end of the year. But “full employment” – an economic term used by the Federal Reserve to denote a healthy labor market – will not be achieved until mid-2024, just in time for Joe Biden (or Vice President-elect Kamala Harris ) seeks re-election.
By the end of 2024, Briggs expects an unemployment rate of 3.9% – above pre-pandemic levels, but still healthy.
Before Covid-19 slammed the country, the US labor market was in a very strong position. The unemployment rate was near a 50-year low of 3.5% in February, and most people who wanted a job had one.
The Biden administration will need to work quickly to support the unemployed and businesses that still suffer. Biden said he would expand unemployment insurance programs in the event of a pandemic and provide additional tax support to businesses.
The recovery in employment will continue to have a favorable effect on the return to work of temporarily laid-off workers, while the newly created jobs will remain available for other unemployed people, the Goldman economist said.
And workers who dropped out of the workforce completely during the crisis, meaning they are neither employed nor looking for work, will slowly return to the workforce after a vaccine is distributed, said Briggs.
One of the reasons for optimism about long-term workforce participation is that many people still cite the pandemic as a reason not to return to their job search. But with a vaccine, that worry will be alleviated.
Monday, drug maker Pfizer (PFE) said his Covid-19 vaccine is over 90% effective. The company plans to apply for emergency use authorization from the United States Food and Drug Administration shortly after the volunteers have been followed for two months after their second dose of the vaccine. Pfizer expects to have 50 million doses ready this year and 1.3 billion doses next year.
– Nadia Kounang of CNN Health contributed to this report.
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