States Recovering Pandemic Job Losses: A Comprehensive Update

In some parts of the country, that recovery is complete.

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Key points

• Millions of jobs were shed in the course of the COVID-19 pandemic, creating an unprecedented unemployment crisis.
• At this point, four states have managed to gain back all of the jobs they lost, but many are still trailing.

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When the COVID-19 crisis first erupted in the U.S., many businesses were forced to shutter temporarily to prevent the spread of the virus. That led to an unprecedented number of unemployment claims, to the point where the jobless rate reached a record high in April 2020.

Things got so bad that lawmakers were forced to rush to the rescue with aid. That aid came in the form of stimulus checks and a $600 weekly boost to jobless benefits.

The economic situation has thankfully improved greatly since then. In fact, in December, the national jobless rate dropped to its lowest level since the start of the pandemic. Not only that, but job opportunities most definitely exist in today's labor market -- at least on a national level.

But on a local level, some states are doing much better than others when it comes to their respective labor markets. In fact, only four states so far have managed to regain all of the jobs they lost during the pandemic.

Where jobs are fully restored

Texas, Arizona, Utah, and Idaho have all managed to recoup all of the jobs their workers lost during the pandemic. But some states are far off from reaching that point.

Though nearly all states have recovered at least half of the jobs they lost during the pandemic, some are seeing job growth stagnate due to the ongoing COVID-19 crisis. Take Hawaii, for example. As a state that relies heavily on tourism for job creation and growth, it's struggling to recoup lost jobs as health fears and restrictions keep travelers away.

New York, meanwhile, has only recovered 60% of the jobs lost during the pandemic. Like Hawaii, New York's economy relies heavily on tourism. And while New York has a more diverse labor market, let's not forget that when the health crisis first erupted, New York was its instant epicenter. It’s been tough to recover from that blow.

How long will it take for more states to recover?

Without a crystal ball, it's hard to predict when job recovery will be 100% across all 50 states. But the important thing to know is the U.S. economy has, on a whole, made great strides since the start of the pandemic. As such, there's a good chance unemployment levels will hold relatively steady or improve in the coming months, even as the omicron variant continues to wreak havoc and disrupt everyday life.

Of course, the downside to a broad economic recovery is the notable absence of federal aid. Given where the jobless rate is at, it's unlikely Americans will see another stimulus check hit their bank accounts anytime soon. But states that lag behind on the recovery front may decide to give out targeted aid to those still impacted by job loss. It's a lot easier to make that case for that sort of aid than to advocate for a widespread round of stimulus payments when jobs are abundant in much of the country.