The staggering job losses since the start of the lockdown in many industries may prove to be permanent according to market analysts looking at the latest data.
Following the lockdown and the impact of the pandemic on multiple sectors of the US economy, unemployed claimants rose by 345,000 in September to 3.8 million.
With furloughs coming to an end, job losses could be permanent as industries including aviation, tourism and events have not seen a recovery anywhere near the level it was pre-lockdown.
The Labor Department classified the latest unemployment figures as those who had permanently lost their old jobs, factoring in the expiration of government backed schemes.
The problem of permanent unemployment in the latest data suggests that businesses have not rehired those that had to stop work as demand in those sectors has not recovered. This is compounding the US economic recovery as entire industries including aviation have come to a halt and there are now big hurdles to re-start operations where there is little demand.
However, it’s not all bad news for the economic recovery thus far, with more than 661,000 jobs added in September, showing that American businesses are hiring again, but sectors like aviation and retail are struggling with the recovery projected to take years.
This could mean in the mid-term that stubbornly high unemployment becomes the new normal, with a slower recovery while industries climb a hurdle to get back to where they were as the pandemic continues and demand for hotels, plane tickets, restaurants and more remains subdued.
Source: The Britonian