Raging COVID-19 cases are expected to control the US labor market in December

WASHINGTON (Reuters) – The US economy probably created the lowest jobs in seven months in December, or even shed workers, as the country was spared the onslaught of COVID-19 infections, Which is expected to be an early winter.

FILE PHOTO: Construction workers wait in line to perform temperature tests to return to work after lunch on November 10 in Manhattan Borough of New York City, New York, US amid outbreak of coronovirus disease (COVID-19) . 2020. REUTERS / Carlo Allegri

Despite the anticipated weakness in the Labor Department’s closely watched employment report on Friday, the economy is unlikely to return to a downturn, providing backstops with additional epidemic relief approved by the government in late December. More fiscal stimulus is expected.

This week Democrats won two Senate seats in runoff elections in Georgia, gaining control of the Chamber and broadening prospects for President-Elect Joe Biden’s legislative agenda.

Biden will be sworn in on January 20, recovering more than half of the 22.2 million jobs lost during the recession that began in February. At least 19 million Americans are receiving unemployment checks.

Ryan Job Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania, said, “Job growth has declined, as labor markets are an easy part of recovery, with workers mostly missing their course.” “COVID-19 cases and tight restrictions placed heavily on the job market in December to prevent the spread of the virus.”

According to a Reuters poll of economists, nonfarm pay increased by 77,000 jobs last month after rising 245,000 in November. This would be the smallest gain since the recovery of jobs started in May and leave 9.763 million jobs from the February low.

There is also a strong possibility that the payroll has been dropped in December, which will end the seven-month recruiting streak. The first application for unemployment benefits occurred in mid-December, when employers were surveyed for employment reports.

The companies announced an 18.9% increase in layoffs last month, and contracted a measure of service industry employment. Consumers were also very low in their assessment of the labor market.

STIMULUS, Vacancies

But any drop in payroll will likely not result in job losses. Congress approved about $ 900 billion in additional stimulus last week, which is expected to lift household income and consumer spending. Economists predict that the Biden administration will provide another package by March and boost infrastructure spending.

There is also optimism that the rollout of coronavirus vaccines will be better coordinated under the new government.

“We are in the midst of a recession that needs to get through the holiday shutdown and the growth of the virus,” said Joel Norf, chief economist at Naroff Economics in Holland, Pennsylvania. “Hopefully, we will see better coordination on the vaccination front, but given the indifference to health shown by the population over the past few months, it is hard to see if the virus will grow to anything but worsen before it gets better Will be done.”

Last month the payroll was probably held back by job losses in the leisure and hospitality sectors, with indoor dining being banned in most jurisdictions. Manufacturing and construction industries have hired more workers to meet strong demand for goods such as motor vehicles and homes. This underlines what is known as a K-shaped recovery, where better-paid workers are doing well, while lower-paid workers are struggling.

Government employment is likely to decline for the fourth straight month. Most of the job losses have occurred in local government education, with most schools transferred to online learning.

The unemployment rate is projected to increase from 6.7% in November to 6.7% in November. The unemployment rate has been perceived by people as “missing from work but absent from work”.

The government will revise the household survey series on Friday, from which the unemployment rate has come out, going back five years. However, modifications are not expected to correct the classification error.

“Given the large-scale swings in the largest household survey series in 2020, those amendments are likely to be higher than normal this year, but they will not, frankly, change the original story of a decline in employment in spring. But Incomplete recovery in the coming months, ”said Lou Crandall, chief economist at Jersey City’s Wrightson ICAP.

The amendments would include labor force participation rates, or the proportion of working Americans who have a job or are looking for one, as well as an employment-to-population ratio, seen as a measure of the economy’s potential is. Create employment

Reporting by Lucia Mutikani; Editing by Cynthia Osterman


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