Fitch Predicts Full Employment Won’t Happen Until Q4 2022
Right now, though, businesses in some sectors, notably lodging, can’t find enough workers.
Full employment won’t happen until the fourth quarter of 2022, Fitch Ratings is predicting.
The prediction comes about a month after Minneapolis Federal Reserve Bank President Neel Kashkari estimated full employment will take a few years.
The recent severe job market shock has led to an increase in long-term unemployment and permanently discouraged some older workers who lost their jobs during the pandemic from looking for jobs again, Fitch said.
Fitch put the threshold for full employment at a 4.3% unemployment rate.
At the same time, there is a different kind of shock affecting some employers.
Businesses in some sectors, notably lodging, can’t find enough workers. “The stories of general managers cleaning hotel rooms are not exaggerated,” said Scott Berman, leader of hotels and hospitality sector at PricewaterhouseCoopers.
Restaurants and other industries important to commercial real estate investors are seeing shortages as well.
One of the problems for restaurants finding enough workers, Alice Cheng of Culinary Agents, a job site for the industry, told CBS News is everyone is hiring all at once. “That’s causing supply and demand issues right off the board.” Another data point: The National Coalition of Associations of 7-Eleven Franchisees said the shortage has led many of the outlets to curb hours.
There has been a lot of discussion that pandemic unemployment benefits have worsened the shortage.
The $300 per week on top of state level benefits appears to be a disincentive for some people to work. And as retailers, restaurants, and hotels try to reopen and get business rolling again, many are scrambling to hire enough workers, said John Chang, senior vice president and director of research services at Marcus & Millichap.
A labor shortage has been cited as justification by Republican governors in Arizona, Arkansas Georgia, Idaho, Iowa, Mississippi, Missouri, Montana, North Dakota, Ohio, South Carolina, South Dakota, Tennessee, Utah and Wyoming for announcing they will terminate the $300 payments in June or July.
Meanwhile, the Bureau of Labor Statistics reported this week that employment was up in all of the states for the year ended in April.
The largest job increases occurred in California (+1,302,100), New York (+1,029,800), and Texas (+1,007,100). The largest percentage increases occurred in Michigan (+21.1%), Nevada (+17.6%), and Rhode Island (+17.1%).