More permanent job losses coming as recession enters its second stage: economists

Although the American economy has been steadily adding jobs back after the initial shock of the COVID-19 pandemic put tens of millions of people out of work, economists are seeing signs that more permanent job losses are on their way.

Axios reports that "economists are warning that the economic downturn caused by the coronavirus pandemic is now creating another recession: mass job losses, business failures and declines in spending even in industries not directly impacted by the virus."

Although many businesses have since reopened after initially closing down during the early months of the pandemic, other businesses are finding that they aren't seeing as much demand for their services even after restrictions on economic activity have been lifted.

"As the recovery has slowed down we’ve seen a couple of metrics transform from something that was extraordinary and unique and that we’d only seen in this COVID recession to something that is much more in line with our historic experience with typical recessions," Evercore ISI economist Ernie Tedeschi tells Axios.

Darius Dale, managing director at Hedgeye Risk Management, similarly tells Axios that "our view is that the U.S. economy is transitioning from a depression to a recession and not a recovery."