“Absent Hiring Activity on An Unprecedented scale, Unemployment Could Remain in Double-Digits Into 2021” – new @sffed paper… Top JPMorgan Investment Officer: It Will Take ’10 to 12 Years’ for U.S. Employment Levels to Return

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Top JPMorgan Investment Officer: It Will Take ’10 to 12 Years’ for U.S. Employment Levels to Return

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J.P. Morgan Chief Investment Officer Bob Michele predicted it will take 10-12 years after the pandemic for U.S. employment to get back to its pre-coronavirus level, insisting it won’t be as simple as turning the economy back on.

“No, it’s not that simple … it’s going to take years, or longer to get back to where we are, or where we were,” Michele said on Bloomberg when asked if reopening would be as simple as “turning on the lights.”

Michele noted that there was a huge error when predicting unemployment numbers, as millions of Americans are losing their jobs amid the pandemic. He then compared unemployment rates during the coronavirus outbreak to the 2008 financial crisis.

“When you look at the congressional budget office forecast for the end of 2021, they have unemployment at 9 percent, so sure, materially better than where we’re going to peak in the high teens, but during the peak of the financial crisis, unemployment hit 10 percent,” he said. “So even looking out a year and a half from now, we’re still going to be roughly where we were at the peak of the financial crisis.”

Michele questioned what would happen when the Paycheck Protection Program (PPP) runs out of money and predicted that even when the economy reopens, Americans will not be spending the same way they did before the virus hit, which could lead to another round of layoffs.

 

 

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