A recent report by Fitch Ratings projects that by the end of August, the U.S. labor market will recapture all jobs lost during the pandemic, according to CNN. That would mean that employment numbers would return to pre-pandemic levels in barely two years. In contrast, Fitch said it took six years and five months for the jobs market to fully bounce back after the Great Recession. 

CNN reported that the economy added 431,000 jobs in March and the jobs report due on Friday is expected to show another 405,000 jobs were gained in April. Payrolls would need to continue to grow by about 400,000 jobs per month in order to get back to pre-pandemic levels. 

According to CNN, Moody's Analytics is also forecasting a return to pre-Covid employment in the third quarter, of 2022 which ends Sept. 30. While the jobs market has not fully recovered the number of jobs that would have been created had the downturn not occurred—approximately 4.5 million job—the projected return to pre-pandemic levels of employment indicates a rapid recovery from the pandemic due in part to unprecedented support from the Trump and Biden administrations, Congress and the Federal Reserve. 

According to the Fitch report, 13 US states, including Florida, Georgia, Colorado and Arizona, have already fully recovered all jobs lost during COVID-19. The report warns of an "acute labor shortages in many states," especially in the West and Midwest. It further states that the very tight jobs market has lifted wages, especially among lower-income workers. As a result, workers have the flexibility to quit their jobs and get better ones. Yet paychecks are still failing to keep up with the 40-year high for prices. So adjusted for inflation, paychecks are shrinking. 

According to the report, the tight job market is making inflation worse. The Federal Reserve wants to avoid a wage-price spiral, whereby high prices cause workers to demand higher wages, which causes higher prices, and so on. CNN quoted Fed Chairman Jerome Powell, who in a March press conference said that there are at least 1.7 job openings for every unemployed person nationally. "That's a very, very tight labor market— tight to an unhealthy level," Powell said. The Federal Reserve is seeking to cool off the jobs market, and inflation, by raising interest rates.