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Companies are hiring and unemployment is falling in most advanced economies in the hope that vaccines will eventually contain the coronavirus. But not every job comes back.
The pandemic is pushing out older workers and exacerbating inequality as lower-income workers feel the brunt of the crisis. Economists warn that there is still a way before global employment returns to where it was before the pandemic.
Here is a picture of job recovery in the most developed economies:
Reviving US the job market creates more opportunities with a faster clip than many economists and employers expected. Non-farm payrolls increased by 916,000 in March, taking away economists’ average estimates of 660,000 jobs. But there are gaps. There are still nearly 2 million fewer women in the U.S. workforce than before Covid. Black women in particular lag behind other earnings groups. Bloomberg Economics sees US unemployment fall below 6% in the current quarter, then target 5.1% in the fourth quarter before falling to 4% at the end of 2022.
JapanSustainable employment masks the main weakness. The share of available jobs is still falling sharply from pre-pandemic levels, reflecting poor employment in hotels, restaurants and bars. The unemployed are more numerous than those laid off or on leave, and the number of people leaving the labor force is generally increasing. Bloomberg Economics expects Japan’s unemployment rate to rise to about 3.0% in the second quarter as renewed measures to curb the virus affect the services sector.
German employment is more sustainable than in other European countries due to the greater dependence of the economy on production, although thousands of businesses remain affected by the recently expanded pandemic constraints. Still, many businesses are strained by nearly six months of blockades, and the job market has a long way to go before it can fully recover. Bloomberg Economics expects the unemployment rate in Germany to fall to 4.2% in the fourth quarter and to be 4% at the end of 2022.
The Great Britain the labor market weakened unexpectedly in March as companies’ wages fell for the first time in four months and more people dropped out of the workforce. Long-term youth unemployment was highlighted as a particular concern. Total employment remains at about 800,000 lower than before the pandemic. Bloomberg Economics expects unemployment in the UK to peak at 6% in the fourth quarter before falling to 4.8% in the last quarter of 2022.
While the number of job seekers in France has fallen from the all-time record in the first blockade, the number remains above pre-crisis levels and about two million people were still in the short-term work schedule in February. The increase in training registrations suggests that French workers expect fundamental changes in the labor market. Bloomberg Economics expects the unemployment rate in France to rise to 8.3% in the third quarter before falling to 8.0% in the fourth quarter of 2022.
Italy has lost about 896,000 jobs since the start of the pandemic in February last year. It was one of the first countries affected by the virus with severe blockades, which caused economic output to fall by almost 9% last year. Unemployment fell to 10.1% in March from 10.2% a month earlier. Women and young people, as well as the services sector, remain most affected by the effects of the pandemic. Bloomberg Economics expects the unemployment rate in Italy to fall to 9.4% in the fourth quarter before falling to 8.9% at the end of 2022.
CanadaThe US economy has recovered about 90% of the nearly 3 million jobs lost during the first wave of the pandemic, compared to just over 60% in the United States. For months, the data showed a recovery that surprised even the most optimistic analysts – sustainability forced the Central Bank of Canada to be the first major central bank to signal its intention to reduce levels of emergency monetary stimulus. Bloomberg Economics expects the unemployment rate to fall to 6.7% in the fourth quarter of 2021 and then to 5.9% in the fourth quarter of 2022.
South KoreaThe EU job market has just begun to recover, but much of the increase is due to temporary and daily workers – employment and labor force participation remain well below pre-Covid levels. Wage growth remains weak and youth unemployment remains highest among all age groups, while employment over the age of 60 is least affected throughout the pandemic. Bloomberg Economics expects unemployment in South Korea to average around 4% this year.
Australia was one of the first countries to reclaim all lost jobs as a result of the pandemic, reflecting the successful early suppression of Covid-19 and the massive fiscal-monetary shot that pushed the economy back. Participation is at a record high, and the unemployment rate is moving fast in the right direction. But wage growth is slow, and although underemployment has declined, there are many who want extra hours. Bloomberg Economics expects the decline in the unemployment rate in Australia to slow down in the second half of 2021 and does not see the unemployment rate to fall below 5% by 2024.
“The start of a rapid recovery in the United States and the cleansing schemes that keep workers attached to jobs in Europe mean the labor market landscape is not as bleak as it could be,” said Tom Orlick, chief economist at Bloomberg Economics . “Yet, with the pandemic accelerating the transition of the Amazon effect from small, labor-intensive companies to their larger, technology-savvy rivals, the road to full employment will be difficult.”
– With the assistance of Andrew Atkinson, Theophilos Argitis, William Horobin, Paul Jackson, Gion Lee, Alessandra Milacio, Giovanni Salzano, Yuko Takeo, Alexander Dance, Alexandra Verude, Alexander Weber, Maeva’s cousin, Dan Hansen, Andrew Hanson, Andrews, Andrew “Masu” Masujima, James McIntyre and Carl J. Riccadonna