Economy Permanent Job Losses

FILE - People wait to speak with representatives from the Oklahoma Employment Security Commission about unemployment claims Thursday, July 9, 2020, in Midwest City, Okla. Stark evidence of the damage the resurgent viral outbreak has caused the U.S. economy could come Friday, Aug. 7, when the government is expected to report that the pace of hiring has slowed significantly after a brief rebound in the spring. (AP Photo/Sue Ogrocki)

WASHINGTON — Stark evidence of the damage the resurgent viral outbreak has caused the US economy could come Friday when the government is expected to report that the pace of hiring has slowed significantly after a brief rebound in the spring.

As the Coronavirus continues to transform a vast swath of the economy, it’s becoming evident that millions of Americans face the prospect of a permanent job loss that will force some to seek work with new industries or in new occupations. If so, that would lead to a slower recovery in the job market than if restaurants, hotels, bars and retail shops were able to fully reopen and recall all their laid-off employees. Few expect that to happen.

On Friday, economists expect the government to report that employers added 1.6 million jobs in July, according to data provider FactSet, and that the unemployment rate declined from 11.1% to a still-high 10.5%. At any other time, a million or more jobs would constitute an unheard-of increase. But July’s expected gain would fall way short of June’s 4.8 million increase and would signal that hiring has sharply slowed. It would also mean that the economy has regained barely 40% of the jobs that fell to

the Coronavirus.

The pandemic has lasted far longer than most Americans expected, with likely profound consequences for the economy. Traditional retail stores will probably never regain their pre-pandemic levels of sales or employment as consumers increasingly turn to Internet purchases. Online health care will likely eliminate some doctors’ office jobs. And online videoconferencing will replace some portion of business travel. Those changes alone could destroy millions of jobs.

Michelle Holder, a labor economist at John Jay College, said it’s unlikely that many retail workers and others whose jobs are gone for good will find work this year, given that the viral outbreak will hold back hiring until a vaccine is widely available.

Steven Davis, an economist at the University of Chicago, estimates that even after the virus has been brought under control, the proportion of people working from home will triple compared with pre-pandemic levels. That could result in the shuttering of many restaurants, coffee shops and other downtown businesses.

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