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How the pandemic reshaped the U.S. workplace, according to SIFMA economists

Posted by Shivali Anand

March 11, 2022    |     3-minute read (449 words)

The Securities Industry and Financial Markets Association's December 2021 outlook report predicts that the COVID-19 pandemic will exert long-term effects on the U.S. economy. According to the report’s authors, pandemic-related disruptions have left an indelible mark on the country's workforce, and certain sectors will likely never get back to their pre-pandemic levels.


For its semi-annual study, conducted Nov. 15 to Dec. 3, SIFMA interviewed the chief economists of 27 global and regional financial businesses on their economic expectations for the U.S. Among the economists’ forecasts:
  • More than 70% of respondents predict the number of employees working in offices will never return to pre-pandemic levels. 
  • Lack of child care; school closures; workers choosing to work from home; lingering health concerns; and fears of contracting the virus were identified as factors impeding any large-scale return to the workplace.
  • Some 47% of respondents foresee an increase in the number of customers returning to high-density activities once vaccines are widely disseminated. Nevertheless, this number will be nowhere near pre-pandemic levels, in their view.
  • Due to changes in consumer behavior and expectations, almost 90% of the participating economists foresee a long-term or permanent negative impact on the hotel business, and 83% expect the same for the airline industry.
  • Some 43% see the continuance of COVID-19 safety measures as a hindrance to returning to normalcy.

Forecasts of macroeconomic trends

In addition to projecting the long-term effects of the pandemic on the labor force, the survey's participants anticipate the following economic developments.

Supply chain pressures:

Over half of respondents (47%) anticipate supply chain limitations to be resolved by the end of the second quarter of 2022. On the other hand, wage pressures, which tend to be more persistent, are likely to endure longer.

Stricter monetary policy:

 Respondents predicted a tighter monetary policy in 2022, based on the above-inflation estimates, but they disagree on the date of the first Fed rate rise.

According to the survey, 29% of respondents forecast the first raise in the second quarter of 2022, 29% in the third quarter and 29% in the fourth quarter. Another 12% anticipate the first rate rise will not occur until 2023.

Labor force contracting:

 According to 46% of respondents, the labor force participation rate will never return to pre-pandemic levels. The same percentage believe the labor force participation rate will revert to its pre-pandemic level of around 63% after 2022.

GDP growth:

 More than 80% predict a long-term potential GDP growth rate of 1.5% to 2%, with 53% claiming that this is lower than pre-COVID forecasts.

Unemployment rates:

 The unemployment rate was forecasted to conclude 2021 at 4.5% and decline to 3.5% in 2022, based on the fourth-quarter average.

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