But new infections remained high at the beginning of September and employers are still struggling to find work, as many people who have lost their jobs in the pandemic have not yet looked back. Supply chain bottlenecks have also worsened, factories slowed, home builders restricted, and some store shelves emptied.
Many economists still believe that most of the roughly 3 million people who have lost their jobs and stopped looking for work since the outbreak of the pandemic will resume their searches when Covid wears off. It took years after the 2008-2009 recession for the proportion of people working or looking for work to return to pre-recession levels. The government does not count people as unemployed unless they are actively looking for work.
Some of the factors that have kept many unemployed on the sidelines may be fading. For example, according to a survey by the Census Bureau, the number of people who are out of work because they have to stay at home to care for a child fell by half in September compared to June. That number had barely decreased last fall when many schools remained closed and conducted virtual learning. The new census figures suggest that over the past month, at the start of the school year and the return of their children to school, more parents, especially mothers, may have returned to work.
In addition, a survey by Indeed’s job board website in August found that the proportion of unemployed Americans who said they’d like to get a job early in the school year had more than doubled from just two months earlier.
But there are also signs that it may be too early to expect a flood of parents re-entering the labor market. Lael Brainard, a member of the Fed’s Board of Governors, recently stated in a speech that Covid-19 outbreaks in late September resulted in 2,000 schools in 39 states being closed for an average of six days.
Several expanded unemployment benefits ended in early September, including a federal allowance of $ 300 per week, as well as programs that for the first time covered gig workers and people who were unemployed for six months or more. So far, the discontinuation of these programs appears to have had little impact on the number of jobseekers.
Governors in about 25 states ended the $ 300 perk before it expired statewide in September. Research by Goldman Sachs economists found that unemployed people looking for work were much more likely to take a job when their benefits ended. But the early interruptions didn’t mean people on the sidelines started searching again, Goldman concluded.
Another reason for labor shortages is a surge in retirements of older, more affluent workers, whose home and stock portfolios have grown since the pandemic broke out and who have managed to build savings. Goldman Sachs estimates around 1.5 million people have retired who would not have done it before the pandemic turned the economy upside down. Many of these people are likely to remain in retirement, economists expect.
Meanwhile, fear of Covid is keeping some potential job seekers on the sidelines, especially those who have previously worked in public service jobs in restaurants, bars, hotels and retailers.