Goldman Sachs predicts an unemployment rate of 4.1% by the end of 2021.
The prediction is the lowest of Wall Street and the firm predicts that it will go down further.
Goldman Sachs Predicts Employment Boom By The End Of 2021!
The restart of hiring in hospitality industry will combine with the economic stimulus to create the employment boom.
As per the predictions of Goldman Sachs, the unemployment rate will go down. It will reach the point where it was before the COVID 19 pandemic. The company sees a job boom. The rate of unemployment may even go lower. It will depend on how powerful the economy can rebound with the help of the stimulus and the return to work for the sectors that were the hardest hit. The firm also foresees the economy getting back its pre-pandemic luster by the end of 2022. The reasons why they see this rebound are:
- The pent-up savings
- Economic stimulus
- The hiring boom
The firm’s prediction is the lowest of the Wall Street. It also predicts that the economy may gain back its pre-pandemic strength perhaps towards the middle of the year.
In the month of February, before the pandemic struck, the unemployment rate was 3.5%. It was the lowest in half a century. It rose to 14% by April. This happened because of the shutdown of businesses and other restrictions. Still, the employment rate remained 8.5 million. It was much lower from the previous year.
The return of the workforce and the hospitality will combine with economic stimulus to bring down the unemployment rate. Another reason for such a prediction is that the loss of jobs is focused mainly in virus-infected areas. It will be alright when the economy opens again.
The boom in the hospitality sector gives a hint of what is about to come in the coming weeks. This sector alone added 355,000 jobs in February. Besides, there is a lot of potential in the hotel, restaurant and bar industry. . The unemployment rate is still 13%. Previous year, it was 5.7%. In the previous year.
Besides hospitality, growth of government payroll too will contribute towards the rising employment rate. The pandemic seems to give momentum to the workforce. And women seem to lead from the front. Another factor is the participation of the labor force. This plays an important role not only with regard to employment, but also in the matter of engagement. The rate has come down to 61.4%. It was 63% the previous year. The decline has been stronger among women. And for the black people, it is 60.1% from 63.1%… Most of the workers say that pandemic is the reason they left it. And they are sure to come back when life gets back to normal.
Goldman’s is the strongest prediction of a comeback. There are also other agencies who feel the same. But they don’t expect this surge. According to one group, the February’s payroll increase was a bit lower than what the firm expected. According to another such an agency, the restaurant sector is already showing the signs of a comeback. The persistent activity in dining-in activity indicates that the trend will continue for some time. An employment index that the Conference Board compiles hit 101.01 in February, which is off about7.8% the previous year. The trend is suggesting an unemployment rate below 5% agencies say. According to Goldman, households alone will contribute $350 to the economy. In fact, the power of buying is expected to surpass even corporate buying. Equities still continue to remain volatile. This happens because investors shift their strategies to sectors that are likely to reopen. To be sure, Goldman’s Sentiment Indicator currently sits two standard deviations above average, implying “extremely stretched” positioning in stocks. Such crowding will serve as a headwind to market gains, the team said.