Less than half of jobs lost in coronavirus crisis will return, experts say

Less than half the US jobs lost to the coronavirus crisis will be recovered by the end of next year, a new survey shows.

Economists expect non-farm payrolls to shed a monthly average of more than 4.5 million jobs from April through June as the pandemic keeps the economy largely frozen, according to the National Association for Business Economics survey released Friday.

But just about 1.9 million of those will be added back through 2021 as the economy tries to get back on its feet, experts predict. They say the unemployment rate will only fall as low as 6 percent by the end of next year after peaking at 12 percent in the second quarter of 2020, compared with 4.4 percent in March, the survey shows.

Economists “believe that the US economy is already in recession and will remain in a contractionary state for the first half of 2020, as the COVID-19 pandemic severely restricts economic activity,” said Constance Hunter, the National Association for Business Economics president and chief economist at accounting giant KPMG.

The surveyed experts also expect the nation’s gross domestic product — the value of all goods and services the US produces — to plummet at an annualized rate of 26.5 percent over the next three months amid the shutdown. GDP will start growing again in the third quarter as a recovery gets underway and will continue to expand through 2021, economists predict.

“Despite a sharp deterioration in labor market conditions, the median forecast suggests conditions will improve by the end of the year with support from aggressive fiscal and monetary stimulus,” Hunter said.

The 45 forecasters in the survey offered a wide range of estimates for how much the labor market will suffer from the virus crisis, suggesting great uncertainty about how heavily the shutdown will burden the economy in the months to come.

The most pessimistic predictions said the economy would cut more than 10.4 million jobs in the second quarter and continue the losses into early next year.

But the brightest outlook pointed to about a million job losses in the next three months followed by a gain of 4.5 million gigs in the next quarter.

The survey comes a day after the federal Department of Labor revealed more than 6.6 million people applied for unemployment benefits last week, bringing the three-week total to nearly 17 million. That suggests more than 10 percent of the American workforce has been sidelined as the coronavirus ravaged the economy.