Washington, D.C. — A new original analysis from the Center for American Progress finds that the labor market recovery from the COVID-19 pandemic recession was much faster and more equitable than recoveries following the most recent recessions. The new CAP column illustrates the strength and historic nature of the labor market recovery after the COVID-19 recession.
In the period after a recession, long periods of unemployment and a slow recovery have become commonplace. However, after the COVID-19 pandemic, the Biden administration’s targeted fiscal support, including an expanded social safety net, and a historic federal vaccination program, helped ensure a historically rapid and equitable recovery.
Some key takeaways from the column include:
- The jobs lost were recovered faster than before: During the COVID-19 recession, 21.9 million nonfarm employment jobs were lost—the largest share of jobs lost during a recession on record, dating back to 1939. By June 2022, the labor market had recovered all jobs lost.
- The labor market is adding jobs at a strong pace: Since recession-related job losses were fully recovered by June 2022, the economy has been adding an average of 297,000 additional jobs per month. That’s about 1.6 times faster than monthly job growth before the recession.
- The unemployment rate is beating projections: At the height of the pandemic recession, the unemployment rate skyrocketed to a record high 14.7 percent. The Congressional Budget Office projected that the unemployment rate would not reach 4 percent until mid-2025. Instead, the unemployment rate fell below 4 percent by December 2021 and has remained below 4 percent since February 2022, marking the longest period of under-4-percent unemployment in more than 50 years.
- The recovery has been more equitable: Over the past two years, Black workers have experienced record low unemployment rates, while their gaps with white workers have not widened, which is rare during economic recoveries. Similarly, Hispanic workers have also seen record low unemployment rates, falling from record highs during the height of the recession.
- Labor supply is on the upswing: During the pandemic recovery, men and women ages 25 to 54 have seen their employment rates improve to be near or exceeding pre-pandemic levels. Most notably, women of this age group are employed at their highest rates on record.
“The COVID-19 recession was the shortest recession on record: It lasted only two months, and the economic recovery that followed was faster and more equitable than other recent recessions,” said Rose Khattar, director of economic analysis at CAP and co-author of the column. “Policymakers made the right choice through a robust fiscal response, creating a strong economic foundation for implementation of the Biden administration’s investment agenda and other policies to grow the economy by growing the middle class.”
Read the column: “5 Reasons Why the Labor Market Recovery Was Historic” by Rose Khattar and Lily Roberts
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