Bank of America reports more than 500000 jobs will be lost in the upcoming financial year
Bank of America, an American investment bank and financial services provider, informed a customer last Friday that the United States will experience a severe labor market crisis due to the loss of more than 500,000 jobs in the upcoming fiscal year. One of the biggest banks in the nation, Bank of America, which has its headquarters in North Carolina, provides services to more than 10% of all Americans.
According to the bank’s assessment, the rate of unemployment in the labor market will reach 5.5%. Even though many individuals may lose their employment, the recession’s effects on the labor market will be less severe than in prior downturns. According to Bank of America’s employment growth predictions, job growth will likely remain at a monthly average rate of 372,000, which is where it has been for the past three months.
Bank of America projects that in 2023, the US economy will lose 175,000, 200,000, and 175,000 jobs in each of the first three quarters of the year before adding 25,000 jobs in the fourth quarter. The head of US economics at Bank of America, Michael Gapen, told CNN that “the presumption is a rougher landing rather than a gentler one.” International oil prices have increased as a result of Russian special forces operations in Ukraine and sanctions imposed on the Russian government and economic sectors. This caused high inflation in many different economies around the world.
Fed Chair Jerome Powell has stated that the slowing of the economy that occurs from the Federal Reserve raising interest rates in an effort to reduce inflation will cause some “pain” for American workers. The central bank predicted in September that over the next two years, the US unemployment rate would increase from 3.8% to 4.4%, leading to an estimated 1.3 million job losses in the ensuing 15 months. Bank of America believes that the unemployment rate will reach its highest point of 5.5% in the fourth quarter of 2019. This could make things even worse for workers.
Gapen indicated to CNN that even if these predictions come true, he would still classify the recession as “moderate.” After “six months of weakness,” the bank anticipates that the labor market will stabilize and not be as terrible as in the last two recessions. The US lost 1,500 and 20,000 jobs in March and April of 2020, which resulted in an unemployment rate of about 15% — roughly three times more than what the Bank of America is predicting this time around.