Fitch said it would take about a year and a half for the US labor market to return to full employment.
The federal stimulus package and the gradual reopening of the service sector hardest hit by COVID-19 's epidemic will help boost demand for workers, according to a report released on Wednesday. Still, analysts led by chief economist Brian Coulton do not expect the natural unemployment rate to reach until the fourth quarter of 2022, which Fitch believes is around 4.3 per cent, meaning about 7 million jobs need to be created.
Fitch said the massive shutdown last year would cause some "scars" as some older workers would lose their jobs permanently, reducing the supply of labour. Even so, Fitch expects supply and demand to remain out of balance in the coming months, limiting upward pressure on wages.
"during the COVID-19 epidemic, many white-collar workers worked from home in big cities in New York and California," Fitch senior executive Olu Sonola said in a statement. "A lot of people are likely to continue to telecommute in some way, which could slow the recovery of the labour markets in New York and California."