When Will the Jobs Come Back?
Despite the improving prospects for recovery, the U.S. economy is still down nearly 10 million jobs from its pre-pandemic levels. The three types of job loss—temporary lay-offs, permanent separations, and departures from the labor force—show vastly different dynamics in response to GDP growth. Workers who have left the labor force are the most concerning. We find the labor force participation rate continues to decline well after the end of a recession, which supports the notion of running a high-pressure economy. Considering this lag, and in conjunction with the dynamics of laid-off and permanently separated workers, we estimate how long it will take for the economy to regain the jobs lost during the pandemic.