How long will economic recovery take? CNN Business says that if things continue at November 2020’s pace, it will take the US until March 2024 to return to where it was in February 2020.
Because of COVID-19 occupancy restrictions, online shopping trends, and other effects of social distancing, many industries haven’t hired back the majority of their laid-off or furloughed employees. In fact, only around half of the people who lost their jobs have returned, and the recovery slowed significantly in November.
The one market, however, that is holding steady is the housing market. In fact, it has been able to recover better than other industries.
“The only major sector to display immunity to the economic impacts of the coronavirus is the housing market, which has experienced a strong V-shaped recovery,” said Odeta Kushi, Deputy Chief Economist at First American. “This is largely due to the fact this has been a services-driven recession, disproportionally hurting younger, lower-wage renters that are less likely to be homeowners or home buyers.”
Kushi also reports that residential building is approaching pre-pandemic levels, which will help with inventory.
“Since more hammers leads to more homes, the continued rise in residential construction employment was welcome news for a housing market in desperate need of more supply,” said Kushi.
Overall, the November 2020 Jobs Report does show 245,000 new jobs during the month, so things are improving. However, compared to previous months, it shows a major slowdown. October added 610,000 jobs, for example.
The economy is down 9.8 million jobs since February, and at only 245,000 new jobs a month—pending this new trend sticks—it will take years to catch back up to pre-pandemic numbers. Over half of jobs have been recovered in the last eight months, but the curve is flattening rapidly. And usually, this time of year sees an increase in jobs with temporary workers being hired for busy holiday needs. With COVID-19, that isn’t happening this year.
But those who are still gainfully employed are purchasing homes, keeping the housing market steady.
“Indeed, total low-earning job losses in the third quarter were down 9.6 percent relative to the first quarter, while total high-earning job losses were only down 2.7 percent,” said Kushi. “The bifurcated landscape has allowed potential homeowners who are still employed to channel increased savings towards buying a home and take advantage of record low mortgages.”