Global jobless rate may stay high into 2023

Even as U.S. companies scramble to fill jobs, the global unemployment rate is expected to remain above pre-pandemic levels until at least next year, according to the International Labor Organization.

Uncertainty created by COVID-19 variants continues to weigh on the jobs market — particularly in low- and lowermiddle-income countries, the Geneva-based organization said Monday.

The ILO downgraded its employment forecast, now projecting a world shortfall of 52 million full-time jobs in 2022 relative to the fourth quarter of 2019. It said a return to prepandemic employment levels will probably remain elusive for much of the world through 2023.

“Two years into this crisis, the outlook remains fragile and the path to recovery is slow and uncertain,” ILO Director-general Guy Ryder said in a news release. “We are already seeing potentially lasting damage to labor markets, along with concerning increases in poverty and inequality.”

The employment situation in Europe and North America showed the most encouraging signs of recovery. Southeast Asia, Latin America and the Caribbean had the worst outlook partly because of lower vaccination rates and governments’ reduced fiscal space.

Supply chain disruptions and shifts in market demand created bottlenecks in manufacturing, which the ILO said had a pronounced effect on developing nations that rely on exports of labor-intensive goods or commodities.

“Intense and prolonged supply chain shocks are creating uncertainty in the business climate and could lead to a reconfiguration of the geography of production, with significant implications for employment,” according to the report.

The ILO warned of other downside risks to a full recovery to the global labor market, including the evolution of the coronavirus, government interventions and inflation.

“If inflation becomes more endemic, there may be greater risk that premature austerity measures will be implemented,” it said in the report.