Following blockbuster data showing the U.S. added 917,000 jobs in March, analysts from Bank of America said they expect jobs to return to pre-pandemic levels by the end of the year if that pace of improvement continues.
It’s a much more aggressive prediction than other experts, including the Federal Reserve and Treasury Department, have taken so far this year.
Federal Reserve chair Jerome Powell has said that while he’s optimistic that hiring will pick up in the coming months, it’s “not at all likely” the U.S. will reach maximum employment this year.
In a hearing before Congress last month, Treasury Secretary Janet Yellen said she believes the economy may return to full employment next year.
Bank of America’s analysts said they expect “considerably more job creation” in the leisure and hospitality sectors—two areas hit hardest by the pandemic—in the months ahead as the U.S. economy reopens.
The growth Bank of America is predicting also comes with a risk, the analysts said: jobs could continue to accelerate beyond pre-pandemic levels right as trillions of dollars in stimulus spending kick in and the economy reopens in earnest.
All those factors could lead to dangerous overheating and inflation, which could destabilize an already fragile economic recovery and rattle investors.
“We saw the economy gain traction in March as the American Rescue Plan moved and got passed, bringing new hope to our country,” President Biden said during prepared remarks on Friday. Biden’s flagship pandemic relief bill authorized another $1.9 trillion in federal stimulus spending.
9.7 million. That’s how many people are now unemployed across the country, according to the Labor Department, down from 22 million at the onset of the crisis last spring.
Biden unveiled his next legislative effort, the $2+ trillion American Jobs Plan, earlier this week. That plan is designed to revitalize American infrastructure and manufacturing and jumpstart the transition to clean energy and industry. The Georgetown University’s Center on Education and the Workforce estimated that the plan would create or save 15 million jobs over a decade and that three-quarters of the infrastructure jobs it creates would be for workers with no more than a high school diploma.
I’m a breaking news reporter for Forbes focusing on economic policy and capital markets. I completed my master’s degree in business and economic reporting at New York University. Before becoming a journalist, I worked as a paralegal specializing in corporate compliance.