The U.S. is poised for a "hiring boom" once pandemic restrictions are rolled back and the economy reopens, according to a Goldman Sachs forecast that sees the unemployment rate falling sharply this year.
In an analyst note Monday, a group of Goldman economists, led by Joseph Briggs, projected the jobless rate, currently at 6.2%, could plunge to 4.1% — or even lower — by the end of 2021, as the recovery is boosted by Democrats' $1.9 trillion stimulus package and increased vaccinations.
The forecast, one of the most optimistic on Wall Street, also indicates there's "some possibility of a return to the pre-pandemic rate in the mid-3s this year.”
“Reopening, fiscal stimulus, and pent-up savings should fuel very strong demand growth,” Briggs wrote. "We expect that the labor market recovery will accelerate this spring on the back of increasing vaccinations and easing of policy restrictions."
The latest assessment comes on the heels of the Labor Department's payroll report for February, which showed the employers added 379,000 jobs last month, more than double the estimate by Refinitiv economists, suggesting the labor market's recovery is gaining steam nearly one year into the pandemic.
"Friday’s employment report showed an encouraging pickup in job growth after a winter hiring slowdown, with a sharp increase in the virus-depressed leisure and hospitality category hinting at further large gains to come," the Goldman economists wrote. "We expect that the labor market recovery will accelerate this spring."
Last February, before the crisis began, the unemployment rate stood at 3.5%, a half-century low. In the span of just two months, it surged to 14.7%, the highest since the Great Depression, as the nation's economy came to a near-standstill to stop the spread of the virus.
But it has dropped since then as states eased lockdown measures and the Federal Reserve and government pumped trillions of dollars into the economy to help keep it afloat.
In total, the U.S. has recovered roughly half of the 22 million jobs lost during the first two months of the pandemic. There are still about 9.5 million more Americans out of work than there one year ago, before the crisis began.