US labor market recovery to persist through 2022: Fitch

NEW YORK

The coronavirus pandemic has hit the lower-wage service jobs disproportionately in the U.S. and labor market recovery could persist through 2022, according to Fitch Ratings.

"Employment recovery is far from complete and largely unequal," the global rating agency said in a statement on Wednesday.

More than 22 million people in the US lost their jobs in March and April of 2020 due to the pandemic. The world's largest economy still had 9.5 million unemployed as of June, according to Labor Department figures.

"We’re seeing widening of existing inequalities and a rise in the risk of long-term labor force detachment and economic scarring in the most affected states," Fitch Senior Director Olu Sonola said in the statement.

"The segment of the population that has been unemployed for an extended period of time is most at risk for the impending government support cliff," he added.

While the labor market is very tight in the states of Vermont and New Hampshire, it is showing slack in Hawaii, California, and New York, according to Fitch.

South Dakota and Kansas are the only states that are now back to the pre-pandemic level of high employment to population ratio, whereas West Virginia and New Mexico have the lowest ratio, Fitch noted.