El-Erian points to the great threat looming over the labor market after the pandemic. Allianz adviser spoke out after weak US employment data.
Although the economic recovery is gradually making its way after the coronavirus pandemic, the labor market does not face an easy horizon after the shock suffered. From the economic world, the voices that warn of a jobless recovery are multiplying . They have been joined by that of Allianz’s main economic adviser, Mohamed El-Erian, who has listed the main threats he sees, focusing on one in particular.
Based on disappointing employment data released by the US last week , El-Erian took advantage of an interview with CNBC to question whether workers have the skills to fill available jobs. According to his thesis, employers may have embraced new technologies such as artificial intelligence, robotics and automation faster than the job market .
“That’s the biggest fear we have because what we don’t want is a jobless recovery,” the Allianz man said. “There is a huge question mark about how many will be able to get a job again or will be willing to get it,” he added with concern.
Among the other factors that have caused the weak employment data in the US El-Erian has pointed to the improvement of unemployment benefits, insufficient childcare facilities and the closure of schools . If people earn more by staying home instead of working, and if parents cannot drop their children off at daycare or school, they may not fill available jobs, he argued.
Looking to the markets, where he knows his voice is heard, El-Erian has advised investors to resist the urge to pull out the money as inflation fears and signs of glut mount mount. “There will be a rally of everything,” he predicted, explaining that the monetary and fiscal stimulus will continue to pump liquidity into the markets and boost asset prices in the coming weeks.
