2021/04/02

US Financial System Healing Underway, However Labor Market Has a Long Way To Go

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US Economic Outlook: March 2021

The much-awaited non-farm payrolls report is due for release later today and markets are hopeful that it might reveal a big increase within the number of jobs added to the US economy, a robust sign of revival following the coronavirus pandemic and lockdown driven damage. Economists forecast a rise in jobs by 647k over March, a far higher jump than the 379k rise seen during February and therefore the largest jump in jobs seen since last October.



However, despite the promising numbers expected within the latest jobs report, the US market still faces a challenge of an enormous deficit in jobs, whilst the prospects of long-term unemployment are on the increase. When the pandemic first struck the US a year ago, forcing it to travel into lockdown like most other parts of the planet, the economy lost many jobs through 2020.


A strong NFP report for March would still reveal a shortage of quite 8 million jobs from the world’s most powerful economy. whilst the economy posts a rapid recovery this year, economists anticipate that full recovery to pre-pandemic levels could take around two years.


In Q2 and Q3 of this year, economists expect employment to extend by a mean of around 700k per month, supported by the huge rollout of the COVID-19 vaccines across the country and therefore the multiple rounds of fiscal stimulus implemented by the govt. additionally to an improvement within the market and accrued savings by households to the tune of around $19 trillion, the economy could see pent-up demand being one of the most drivers of an economic rebound within the coming months.

 

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