
<p id="h-topline"><strong><span class="has-inline-color has-vivid-red-color">TOPLINE</span></strong> As the bull market for stocks rages on and even bests pre-pandemic levels, some American households are bouncing back much more slowly than others, unearthing a pattern indicative of a K-shaped (or lopsided) economic recovery, Goldman Sachs said on Sunday–and without additional fiscal relief, it could take years for employment to fully recover.</p>



<h4 class="wp-block-heading" id="h-key-facts"><span class="has-inline-color has-vivid-red-color">KEY FACTS</span></h4>



<p>The biggest driver of the K-shaped recovery taking shape is that pandemic job losses were &#8220;highly concentrated in virus-sensitive industries&#8221; like retail, leisure and hospitality–all of which disproportionately employ low-wage workers, Goldman analyst Joseph Briggs wrote in a weekend note.</p>



<p>Some companies have turned to technology in an effort to boost productivity in the absence of real workers, and it’s working (which is bad news for American workers): Productivity is up 4% this year despite major job losses, according to Moody&#8217;s Analytics, which now estimates the 22 million jobs lost this spring won’t come back until early 2024.</p>



<p>While stimulus measures have helped keep overall disposable income afloat during the pandemic, Americans making less than $30 per hour are feeling the most economic pain.</p>



<p>Slowed wage growth has also been markedly worse for lower-income workers–further contributing to the disparate economic recovery, the Goldman report goes on to say.</p>



<p>Goldman projects a lack of new fiscal relief will cause a fourth-quarter decline in disposable income that will hit the bottom 25% of earners &#8220;particularly hard,&#8221; while also weighing on consumer spending this winter.</p>



<p>The outlook for lower-income workers will get &#8220;significantly worse&#8221; if Congress doesn&#8217;t pass another fiscal stimulus package of at least $700 billion in the first quarter, Goldman notes, adding that additional relief coupled with widespread vaccination could actually help yield a V-shaped recovery, which is characteristic of a quicker, more equitable economic bounceback.</p>



<h4 class="wp-block-heading" id="h-crucial-quote"><span class="has-inline-color has-vivid-red-color">CRUCIAL QUOTE</span></h4>



<p>&#8220;The largest pandemic casualties have been less productive industries including retailing, leisure and hospitality, while the biggest winners have been in more productive industries like technology, wholesaling and professional services,&#8221; Moody&#8217;s Analytics Chief Economist Mark Zandi said in a weekend note, adding that within industries, smaller businesses have fared worse than their larger, more productive counterparts, which are more able to afford large investments in technology and organizational changes. &#8220;This is clearest in retail. Tens of thousands of mom and pop retailers have failed and mid-sized publicly traded retailers have filed for bankruptcy, while the retailing behemoths gobbled up market share. They knew those changes would entail difficulty for their labor forces, [but] the pandemic has effectively given businesses cover to make these wrenching changes.&#8221;</p>



<h4 class="wp-block-heading" id="h-key-background"><span class="has-inline-color has-vivid-red-color">KEY BACKGROUND</span></h4>



<p>November marked the best month for stocks in over 30 years, but the labor market and other economic indicators are flashing serious warning signs. Despite record-low mortgage rates, higher costs pushed pre-owned home sales down in October for a second month in a row, according to a report from the National Association of Realtors released on Monday, and new manufacturing data showed that production output and new factory orders are also falling as Covid-19 cases surge to new highs nationwide. “Storm clouds are gathering,” George Ratiu, a senior economist at Realtor.com&nbsp;<a href="https://www.reuters.com/article/us-usa-economy/u-s-housing-manufacturing-data-suggest-economic-recovery-slowing-idUSKBN28A2IX?il=0" target="_blank" rel="noreferrer noopener">told Reuters on Monday</a>. “This winter could pose an unusual challenge for many people across the country, unless Congress takes significant actions.”</p>



<h4 class="wp-block-heading" id="h-what-to-watch-for"><span class="has-inline-color has-vivid-red-color">WHAT TO WATCH FOR</span></h4>



<p>Potential relief before January. Goldman says it expects Congress to pass a small fiscal package in December that could extend the expanded unemployment insurance benefits set to expire at year’s end.</p>



<h4 class="wp-block-heading" id="h-tangent"><span class="has-inline-color has-vivid-red-color">TANGENT</span></h4>



<p>Despite highly encouraging vaccine-trial results from Pfizer, Moderna and AstraZeneca in the past month, a &#8220;parabolic&#8221; surge in the number of Covid-19 infections is threatening to overwhelm hospitals around the country and has already triggered new lockdown measures on businesses. In a note to clients last week,&nbsp;<a href="https://www.forbes.com/sites/jonathanponciano/2020/11/23/13-million-americans-lose-jobs-covid-cases-skyrocket-but-double-dip-recession-is-unlikely-moodys/">Moody&#8217;s said</a>&nbsp;the resurgent virus could stall or even backtrack the economic recovery in the coming months and force another 1.3 million Americans into unemployment.</p>



<h4 class="wp-block-heading" id="h-further-reading"><span class="has-inline-color has-vivid-red-color">FURTHER READING</span></h4>



<p><a href="https://www.forbes.com/sites/jonathanponciano/2020/11/23/13-million-americans-lose-jobs-covid-cases-skyrocket-but-double-dip-recession-is-unlikely-moodys/">1.3 Million More Americans Could Lose Their Jobs As Daily Covid Cases Skyrocket, But A Double-Dip Recession Is Unlikely, Says Moody’s</a>&nbsp;<em>(Forbes)</em></p>



<p><a href="https://www.forbes.com/sites/jonathanponciano/2020/11/24/dow-jones-industrial-average-hits-record-30000/">Dow Jones Industrial Average Hits Record 30,000–Reaching A Historic Milestone As 11 Million Americans Remain Unemployed Amid Pandemic</a><em> (Forbes)</em></p>



<p><em>-By Jonathan Ponciano, Forbes Staff</em></p>


Tag: Jobs loss

FORBES AFRICA SOCIAL MEDIA

It Could Take 4 Years To Recover The 22 Million Jobs Lost During Covid-19 Pandemic, Moody’s Warns