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Fitch Sees Return to Full U.S. Employment 18 Months Away
A return to full employment in the US is still 18 months away and will require the creation of a further seven million jobs, Fitch Ratings says in a new report. The rating agency says labor-market slack will limit upward pressures on wage inflation.
“Massive job market disruption in 2020 is likely to lead to some medium-term ‘scarring’ and reduced labor supply as long-term unemployment rises and some older workers are permanently discouraged from labor force activity,” according to Fitch. “However, even allowing for this, it will take quite a while for the labor market to regain balance.”
Federal stimulus measures and the reopening of face-to-face service industries are now giving a strong boost to labor demand. However, says Fitch, “the speed at which unemployment falls will be dampened by a relatively swift recovery in labor force participation as social distancing recedes.”
- ◦Economy
