US job market set to recover by September 2022

Things are looking up for the US jobs market.

Fitch Ratings has concluded that all the jobs lost at the peak of the COVID-19 pandemic will be regained by the third quarter (Q3) of 2022. For context, it took almost six and a half years for the job market to bounce back after the 2007/2008 recession.

In fact, Fitch has found that 13 states have already recovered all jobs lost to the pandemic – these include Texas, Florida, North Carolina, and Colorado.

Also, 48 states have already recovered 70% of jobs lost – the only two states not to do so are Hawaii and Louisiana.

This comes as Fitch sees post-pandemic economic recovery continuing at a steady pace in the first quarter (Q1) of 2022.

Median jobs recovered reached 89%, which is up eight percentage points from the fourth quarter of 2021.

The US unemployment rate has now reached 3.6%, down from 4.1% in Q4 2021. It now equals the rate in February 2020 and is actually lower than pre-pandemic figures in 27 states.

What does this mean for labor shortages?

This prediction from Fitch Ratings comes as the US is facing the ‘Great Resignation’ and associated labor shortages.

Currently, Fitch Ratings has found that the US only needs to add 1.6 million jobs between now and September 2022 to reach pre-pandemic payroll numbers. This is equivalent to around 400,000 jobs per month.

Although the job creation for March missed Bloomberg’s estimates, the latest Bureau for Labor Statistics (BLS) study found that the US added 431,000 jobs that month. BLS figures for April are expected later this week.

Fitch’s research found that the ratio of job openings to unemployed people hit post-pandemic highs in February. The median was 1.9, but it was particularly impressive in Nebraska, Utah, and Montana.

Unfortunately, things were looking less promising in the West and Mid-West, as well as Vermont, Nevada, and Maryland.

To achieve this job recovery growth, now is the time for employers to act. Organizations should not just raise wages, but also improve their benefits offerings and ensure they are offering the flexibility that workers so desire in the future.