David Solomon , CEO ofGoldman Sachs , says the US economy still has jobs to shed.- The comments come after May unemployment figures showed a slight uptick in employment after mass layoffs due to the
coronavirus . - "All businesses are learning and seeing ways where there are efficiencies," he said, speaking of companies broadly and not just banks.
The May jobs report was a bright spot for the United States as it struggles with the ongoing coronavirus outbreak, but the head of one of the largest Wall Street banks says the job losses may not yet be over.
David Solomon, chief executive of Goldman Sachs, said Wednesday that there are likely two main time periods for the pandemic: "a period of crisis and then a period of normalization."
"One of the things that's going to be a drag on the economy broadly," he told a virtual conference hosted by Bloomberg, "and one of the reasons I think there's going to be a headwind, is all businesses are learning and seeing ways where there are efficiencies.
"I think that's going to have a toll," he continued, "and an adjustment on workforces more broadly as we get into 2021. That's not something that's specific to financial services, I think that's across industry broadly. I do think this is something that as an economy we'll have to manage as we go forward."
Earlier this month, unemployment numbers for May surprised economists by adding 2.5 million jobs and decreasing the unemployment rate to 13.3%. In previous years pre-pandemic, the unemployment rate had sunk as low as 3.6%.
There are already rumblings that Solomon's likely correct, too.
A survey of small businesses that received funding from the federal government's Paycheck Protection Act by the National Federation of Independent Businesses found as many as 14% of PPP loan borrowers anticipate having to lay off employees after the funds run dry. Congress and the White House have yet to signal any agreement for a follow-up round of business relief or an extension of unemployment funds.
Goldman Sachs' research division has also warned that the stock market recovery that's helped equity prices return to barely below their January levels could get hit with a second selloff if there's a resurgence of the virus.
As for the firm specifically, it's also slowing down certain investments to protect its bottom line too.
"We have some longer term or medium term goals that we laid out at our investor day where we think there are opportunities to run the firm more efficiently," Solomon said, "and we're still committed to those, but obviously the timeline has changed a little but on some of that."
Carmen Reinicke contributed to this report.