Goldman offers less dramatic view of economic damage from pandemic to United States by Bloomberg

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© Bloomberg. People sit in a seating area in Times Square in New York, the United States on Friday, October 2, 2020.

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(Bloomberg) – The economic scars in the United States from the pandemic are much less severe than initially feared, Goldman Sachs Group Inc (NYSE :). An optimistic note about the American situation said in a note.

Trade bankruptcy filings are lower than pre-pandemic levels, business closures have been found to be temporary and unemployment has fallen sharply, which bodes well for the outlook for a medium-term recovery, economists said in the report. note. A vaccine, combined with additional budget support next year, is expected to limit the long-term damage and keep the economy on track for a recovery that could “much faster than usual,” they said.

“When employment fell by 25 million in just over a month, the labor market appeared threatened to once again experience the deep distress observed after the financial crisis,” said economists including David Mericle in the note . “Just five months later, the number of newly unemployed since the shock of the virus has indeed dropped dramatically, and about half still say they are temporarily laid off.”

Despite a recent increase in long-term unemployment, the rapid recovery in demand for labor and the faster pace of labor reallocation should help most workers avoid long spells of unemployment seen in previous recessions, according to the note.

The decline in the labor force participation rate since February largely reflects virus-related barriers to participation that are expected to go away with a vaccine, such as fear of getting sick or the need to care for children while schools are closed, they said.

© 2020 Bloomberg L.P.

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