Even as states begin to reopen for business, a further 2.4 million workers joined the nation’s unemployment rolls last week, and there is growing concern among economists that many of the lost jobs are gone for good. The Labor Department’s report of new jobless claims, released Thursday, brought the total to 38.6 million since mid-March, when the coronavirus outbreak forced widespread shutdowns.
While workers and their employers have expressed optimism that most of the joblessness will be temporary, many who are studying the pandemic’s impact are increasingly worried about the employment situation. “I hate to say it, but this is going to take longer and look grimmer than we thought,” Nicholas Bloom, an economist at Stanford University, said of the path to recovery.
He estimates 42 percent of recent layoffs will result in permanent job loss. “Firms intend to hire these people back,” he said, referring to a recent survey of businesses by the Federal Reserve Bank of Atlanta. “But we know from the past that these aspirations often don’t turn out to be true.” The precariousness of the path ahead was underscored Thursday by the Federal Reserve chair, Jerome H. Powell. “We are now experiencing a whole new level of uncertainty, as questions only the virus can answer complicate the outlook,” he said in remarks for delivery at an online forum.
The economy that does come back is likely to look quite different from the one that closed. If social distancing rules become the new normal, causing thinner crowds in restaurants, theaters and stores, at sports arenas, and on airplanes, then fewer workers will be required. Large companies already expect more of their workers to continue to work remotely and say they plan to reduce their real estate footprint, which will reduce the foot traffic that feeds nearby restaurants, shops, nail salons and other businesses.