Millions of Americans facing prospect of permanent job loss: Economists

Weeks of record job losses have left the United States with unemployment rates not seen in more than a decade, with millions of Americans facing the prospect of a permanent job loss as the resurgence of the coronavirus has caused many states to reimpose restrictions.

The US administration is expected to report on Friday that the pace of hiring has slowed significantly after a brief rebound in earlier months.

That will force many people to seek job with new industries, according to data provider FactSet, which said that the unemployment rate declined from 11.1 percent to a still-high 10.5 percent.

Economists expect the Donald Trump administration to report that employers added 1.6 million jobs in July.

Looking towards the report, they analyzed data from Homebase, a provider of scheduling software to small businesses, and concluded that the US job growth weakened in July compared with June.

Hiring has slowed much more in states with heavy viral outbreaks, including Arizona, Florida, and Texas, according to researchers at the St Louis Federal Reserve.

July’s expected gain would fall way short of June's 4.8 million increase and would signal that hiring has sharply slowed.

US economy collapsed 32.9 percent in the April-to-June period

The US economy collapsed in the midst of the coronavirus pandemic in the April-to-June period, contracting 32.9 percent in the second quarter, the government reported Thursday.

Traditional retail stores will probably never regain their pre-pandemic levels of sales or employment as consumers increasingly turn to internet purchases.

Online healthcare 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.

A survey by The Associated Press-NORC Center for Public Affairs Research in July found that nearly half of those who have lost jobs during the COVID-19 pandemic said those jobs are gone for good.

According to Michelle Holder, a labor economist at John Jay College, it is unlikely that many retail workers and others whose jobs are gone for good will find work this year.

She said that the pandemic will hold back hiring until a vaccine is widely available.

"It's definitely going to be a drag on the economy," Holder said.

Steven Davis, an economist at the University of Chicago, however, said even after the virus has been brought under control, the proportion of people working from home will triple compared with pre-pandemic levels.

Davis said that, "This recession is unusual in the extent of permanent [job] reallocation that will ultimately result."

Pandemic represents biggest shock to US economy in living memory: Fed Chair Powell

US Federal Reserve Chairman Jay Powell says that the coronavirus pandemic has been “the biggest shock to the US economy.”

That could result in the shuttering of many restaurants, coffee shops and other downtown businesses, he said.

Widespread school closings in coming months could also depress job gains in future months, according to Oates, a former Labor Department official who is president of the nonprofit WorkingNation.

He argued that many parents will have to quit jobs to watch their children.

"I worry about what that means for women, who are most often in that role," Oates said. "That's going to be disruptive."

Trump is pushing hard for schools to reopen this fall as he continues to underestimate the threat of the virus to which, he said, children have immunity.

The US reported close to 52,000 new coronavirus cases on Wednesday, bringing the toll of infected people to over 4,821,000.

More than 158,170 people have died from Covid-19 in the US.

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