Employment Outlook Tied to Vaccine Rollouts, but Recovery May be Slow
The U.S. employment picture is gradually improving, but still unclear is whether COVID-19 vaccines will dramatically change consumer habits enough to realize a full economic recovery in the near-term, according to an economics professor at Florida Atlantic University.
Some experts say the nation may soon enter the early phases of herd immunity, which would cause infection rates to plunge quickly and allow businesses to reopen or expand. But government regulations still may discourage a return to normalcy in the interest of public health. Either way, the fate of the economy will be a major talking point in 2021 as the nation seeks to dig out from the devastation caused by the pandemic.
From January to April 2020, the U.S. economy lost 22 million jobs, but the latest employment figures show that more than 12 million of those positions have returned – even without vaccines widely available, noted William Luther, Ph.D., an assistant professor in FAU’s College of Business.
“When the pandemic began, we didn’t really know what we were dealing with,” he said. “There was a lot of uncertainty. We took crude steps to limit the spread, and economic activity suffered immensely. Then, as we learned more about the virus, we were able to adopt more sophisticated mitigation strategies like social distancing and wearing masks, which allowed many of us to return to work.”
Luther explained that the nation still is operating at a reduced capacity, with the latest unemployment rate at 6.3 percent.
“That’s a huge improvement from the 14.8 percent unemployment rate realized back in April,” he said. “But, before the pandemic, the unemployment rate was only around 3.5 percent.”
It’s likely that even more people will return to work over the next four to six months as the general population gains access to the vaccines. The speed of the recovery will depend in large part on how quickly those vaccines are administered, according to Luther.
But he added it’s also possible that regulators will remain cautious about lifting such policies as mask mandates, which limit the virus’ spread but also discourage people from eating out in restaurants or visiting amusement parks, among other activities.
“It’s tough to find the right balance,” Luther said. “We don’t want to let our guard down prematurely and see a surge in cases and deaths. But we also don’t want households to suffer economically any longer than is absolutely necessary.”