US | How will employment recover from the COVID-19 crisis?

Summary

The COVID-19 health crisis has led to a steep fall in economic activity and employment. The recovery of the labor market will depend on how firms adapt to the new normal, the adjustment of global value chains, changing consumer preferences, and the effects of automation and digitalization.

Key points

• Key points:
• The loss of nearly 20 million jobs is unprecedented in modern history and is almost equivalent to total job creation during the last 10 years.
• The surprise increase in employment in May has generated optimism. High-frequency indicators suggest that job creation will continue in June.
• Nonetheless, by the end of the year the economy will have recovered just half of the jobs lost until now and unemployment will remain high.
• The decline in employment has disproportionately affected the most vulnerable groups in society and runs the risk of causing long-lasting damages in the labor market.
• It is essential to generate quality jobs to strengthen the middle class and the economic recovery, which in turn would help combat social segmentation and populism, while improving the well-being of the population and strengthening our democratic institutions.

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