Nearly a quarter of temporary layoffs likely permanent: Goldman

Yahoo Finance's Sibile Marcellus joins Akiko Fujita to break down a new forecast from Goldman Sachs that anticipates almost a quarter of temporary worker layoffs to become permanent.

Video Transcript

AKIKO FUJITA: A new warning out from Goldman Sachs today. Economists there projecting roughly a quarter of the jobs that were lost to the pandemic temporarily could become permanent job losses. Let's bring in Sibile Marcellus, who has been looking at that report for us. And Sibile, what kind of numbers are we talking about here?

SIBILE MARCELLUS: Yeah, we're talking about tens of millions of people who have been laid off. So just to take you back a little bit, Akiko. So when we had the coronavirus shut down, more than 22 million people lost their jobs. And the silver lining, at that point, was well, a lot of those layoffs are just temporary. So it's not like all these people have lost their jobs forever. They're going to be able to get rehired and that will help the US economy bounce back more quickly.

Now, what we're seeing here with this new report by Goldman Sachs is that they're seeing that about a quarter of those temporary layoffs will be permanent. So that means that those people will not be able to go back to their jobs. Now when you talk about people who were temporarily laid off, that has helped the labor market, when you look at what happened in May and in June and in July.

But what they're saying is that specifically in July, we started to see labor market take a step back. And it seems like when it comes to rehiring people who were temporary laid off, that's not happening at as great a pace as it was during the other months when the US economy was starting to reopen.

Also when you look at the weekly unemployment numbers, last week was the first time we've seen in a while that the number actually topped 1 million. The week before that, we had seen it fall below 1 million, and that gave us some hope. But we're seeing that that trend hasn't been continuing. So we'll see what happens when those weekly numbers come out on Thursday.

AKIKO FUJITA: Yeah, certainly still a lot of losses ahead, regardless of sort of how significant the recovery has been so far. Certainly the [INAUDIBLE] reminder. Thanks so much for that, Sibile.