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A Return to the Pre-COVID Job Market?

The job market got some more good news this week, as both Fitch and Moody declared it on pace to catch up to where it was pre-pandemic in 2020. And that’s great. But what does it mean about our economy, our job market’s trajectory, and federal (or in this case, the Fed) intervention?

What This Means

According to Fitch Ratings, by the end of August of this year, the US labor market will have recaptured all jobs lost during the pandemic. Moody’s has made the same prediction, forecasting the milestone will come at the end of September, not August. This means that, sometime this Autumn, the US job market will have as many jobs as it did in February 2020.

i9 verification new hire introduction

At just over two years, this is an amazingly quick turnaround that should be heralded as something between good news and a miracle.

Think of it this way: after the great recession of 2008, it took a staggering 6.5 years to make a similar return to pre-crisis levels. Now, only two years and a few months since the pandemic began, we are, essentially, back where we started from.

What This Does Not Mean

It is important to note that Fitch and Moody’s are predicting a return to pre-pandemic levels, which is entirely different from forecasting the job market’s ascent to the heights it would have reached had there been no pandemic. In that case, the economy would have continued growing, and there would be more jobs available. Come Autumn, when we return to pre-pandemic levels, we will still be about 4.5 million jobs below this theoretical benchmark.

Instead of being where we would be if there were never a pandemic, we are right back where we started from when the pandemic began. It’s like the last two years didn’t happen and the job market is heading for the exact same point it was in those simpler times before our perma-pandemic began.

compliance employer celebrating win

Interested in Interest?

But, of course, the last two years did happen. And the job market’s rebound is not happening in a vacuum, it’s happening against the backdrop of a tumultuous economy facing historic inflation and supply chain ruptures.

This is why, as we discussed last week, there is some water already being thrown on this hot job market, with the largest bucket firmly in Fed Chair Jerome Powell’s hands. Under his leadership, the fed hiked up interest rates .5% this week (more to come on that in another blog!). Yet, despite this intervention, the US job market is still on course for this notable distinction.

The job market will return to where it was in February 2020. The only problem is, we can’t.

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