Labor market conditions ‘highlight possible structural shift’ since start of pandemic, says rating agency
Supply constraints in US goods and services, and the labor market is the biggest reason preventing American economy from growing faster, according to S&P Global Ratings.
“Enormous supply constraints are crippling business capacity. This has resulted in much lower economic activity than would be the case if business operations were running smoothly,” it said in a statement on Thursday.
The global rating agency noted that it revised down its 2021 GDP growth forecast for the US to 5.7% in September, from its previous estimate of 6.7% in June.
S&P said the labor market conditions since the beginning of the pandemic “highlight a possible structural shift in the labor force” that include some workers leaving the workforce entirely,others enjoying unemployment benefits, and some having fear of getting infected with COVID-19.
According to agency estimates, around 5 million people in the US are unemployed or have left the workforce since the beginning of the pandemic. “It is difficult to predict whether their decision was short term or permanent.”
More than 22 million workers in the US lost jobs in March and April of 2020 due to the coronavirus pandemic, but the number of unemployed fell to 7.7 million as of September, according to figures by the Department of Labor.