White-collar, middle management jobs lost after Covid aren’t coming back and it appears to be a “recession” for these workers, according to Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University’s J. Mack Robinson College of Business. Looking ahead, Dhawan also forecast US jobs growth will go negative in the first half of next year, while US gross domestic product will moderate sharply in the first half of 2024.

The loss of white-collar, middle management jobs began during Covid lockdowns when businesses realized technology made it possible to operate without a large number of supervisors, Dhawan said in a press release.

It’s a different story for frontline workers; employers are keeping them onboard following the difficulty in hiring during the pandemic, he said.

“This isn’t a recession in the traditional definition because job creation is continuing in the healthcare, hospitality and construction sectors,” Dhawan said. “But that’s not balanced growth. During the so-called ‘Goldilocks economy’ of the late 1990s, two high-paying jobs were created for every one low-paying job. That is not the case now. High-paying job growth is completely stalled. The question is whether or not Federal Reserve rate cuts can spark a reversal.”

Dhawan continued, saying he believes the Fed is done raising rates — the last few hikes were done to buy extra insurance against inflation flaring up again.

“Beginning in spring 2024 when the economy starts to bounce along the bottom, the Fed will come out with rate cuts, and people will be surprised by their aggressive pace,” he said.

Dhawan also forecast that growth in US gross domestic product will moderate to less than 0.5% in the first half of 2024 from an expected 2.3% in the third quarter of this year. Rate cuts from the Fed will prompt the economy to recover by late 2024 with GDP growth averaging a trend-like 1.8% in 2025.

Meanwhile, national job growth will turn negative in the first half of 2024 with an estimated 68,000 monthly job losses. Job growth will rebound to gains of 75,000 per month by mid-2025. Job gains will increase to 115,000 per month by late 2025.