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Expand chart
Data: U.S. Bureau of Labor Statistics; Chart: Axios Visuals

Fed Chair Jerome Powell mentioned "lasting damage to the economy" as a worry three separate times during his prepared remarks on Wednesday, and called it a reason to continue providing support through fiscal and monetary policy.

The state of play: But experts say the damage already has been done, even as we're still in the midst of figuring out just how much. The labor market is changing and many who have lost their jobs are unlikely to get them back.

  • Specifically, economists worry that many who leave the labor force — especially mothers, older workers, minorities, and many who were outside the labor force and had only recently gotten jobs — will return to the sidelines for good.

Case in point, economist Betsey Stevenson sees a long-simmering child care crisis that could have a significant impact on the number of parents, especially mothers, working over the next 20–30 years.

  • “We are letting the whole child care system erode in such a way that it’s not going to be there for us when we are fully ready to go back," she told Politico.
  • "You’re seeing child care centers that can’t stay in business. They can’t figure out how to reopen. They can’t keep their employees on staff. They’re letting people go."

Additionally, Black workers are significantly underrepresented in "remote-compatible jobs," and were also especially prone to the “last hired, first fired” trend that has meant Black unemployment rebounds more slowly than white unemployment following recessions, the Dallas Fed noted in a recent blog.

  • "The benefit that [Black people] received from the tight labor market in recent years may dissipate as the economy falters."

By the numbers: The U.S. labor force participation rate saw its largest decline ever from February to March and has not recovered much of that ground, even as the unemployment rate has declined.

Between the lines: The Hamilton Project's Wendy Edelberg and Jay Shambaugh warn "widespread bankruptcies could fundamentally change the business landscape," leading to a substantial imbalance between companies and workers.

  • "The COVID-19 recession is going to have scarring effects both on the business landscape and labor markets, and policy makers need to be preparing for those effects now," Edelberg told Axios earlier this month.

The big picture: Americans who have lost their jobs are losing hope. In April, 78% of those in households with a job loss assumed it was temporary.

  • As of July, 47% think that lost job is definitely or probably not coming back, according to the latest poll from AP.

Go deeper

Fed chair says economy will see "stronger recovery" with stimulus package

Powell at a congressional hearing in September. Photo: Stefani Reynolds/Bloomberg via Getty Images

Federal Reserve chair Jerome Powell said on Thursday the pandemic-hit economy will recover at a slower pace absent additional stimulus from Congress.

Why it matters: With Congress still gridlocked over another stimulus package — and pending results of the presidential election that put the timing of another package more in limbo — the Fed is facing questions about what more it can do to prevent the economy from backsliding as coronavirus cases surge.

Dion Rabouin, author of Markets
Nov 6, 2020 - Economy & Business

Big businesses' corporate paradise may be coming to an end

Illustration: Aïda Amer/Axios

If Trump's presidency is about to end, an unprecedented golden era for big businesses could end with it.

Why it matters: Thanks to support from the president, Congress, the Supreme Court and the Federal Reserve reaching levels not seen in recent history — if ever — large companies have done a lot of winning.

NRA files for bankruptcy, says it will reincorporate in Texas

Wayne LaPierre of the National Rifle Association (NRA) speaks during CPAC in 2016. Photo: Saul Loeb/AFP via Getty Images

The National Rifle Association said Friday it has filed for voluntary bankruptcy as part of a restructuring plan.

Driving the news: The gun rights group said it would reincorporate in Texas, calling New York, where it is currently registered, a "toxic political environment." Last year, New York Attorney General Letitia James filed a lawsuit to dissolve the NRA, alleging the group committed fraud by diverting roughly $64 million in charitable donations over three years to support reckless spending by its executives.