Job creation came to a halt in December when restrictions imposed by compliance with Covid-19 issues affected virus-sensitive businesses, particularly bars and restaurants, which lost nearly half a million locations.
The Department of Labor said on Friday that non-farm payments fell by 140,000. That was lower than expected for 50,000 economists surveyed by Dow Jones. It was the first monthly fall since April.
The unemployment rate remained unchanged at 6.7%, compared to an estimate of 6.8%. Another unemployment measure that includes disaffected workers and those with part-time jobs for economic reasons fell to 11.7% from 12%.
Markets went down from the disappointment report, possibly expected to strengthen the case for more stimulus from Congress and it showed a possible temporary reduction in postponed jobs as vaccine spreads accelerated Covid. Stocks traded on Friday with small gains.
“In some ways, it’s bad news, because it increases the likelihood of more stimulus,” said Michael Arone, chief investment strategy for the U.S. SPDR Industry. “Investors have proven to themselves this week, with what has happened in Georgia, with the weakness in the economic data, that more help is on the way. We are going to get more fiscal assistance, and that is likely to happen very soon. “
Since recovering in May, the economy had regained 12.3 million lost jobs. The biggest blow has come in the hospitality industry, where hotels, restaurants and bars have been plagued by restrictions restricting travel, food and drink. The December job report showed that the impact has increased.
The industry saw a drop of 498,000 jobs for the month, with the majority coming in restaurants and bars, falling 372,000. Overall, hosting is down 3.9 million jobs since January, a 23.2% drop, the Bureau of Labor Statistics report showed.
In the summer many of the restrictions on the premises’ boundaries were lifted, but they were lifted over the past few months as coronavirus outbreaks arose and states and communities again banned food or drink. inside.
Investors, however, have been looking through the current bad news and keeping a focus on what lies ahead.
One obvious point was that while temporary layoffs grew from 277,000 to 3 million, the rate of permanent job losses went down 348,000 to 3.4 million.
“If we can control the virus, the economy has shown that there is a lot of consumer demand. People want to go out and engage in a variety of activities,” said Patrick Leary, chief of staff. -market strategist and senior trader at Incapital. “Even though the distribution of the vaccine has been slow to begin with, it will eventually become so. The market is reasonably looking at the outcome you want.”
As a unique year drew to a close – around 22 million workers were cooled in March and April – the job market had been booming nonetheless. leave about half of those laid down on the side. That recovery came to a halt in December, although the news was not bad.
Outside of hospitality, the other job losses were quieter, with several businesses receiving hard-hitting benefits.
Private education also declined, 63,000, while government jobs resumed with 45,000 job losses. The other services sector was down 22,000.
Professional and business services saw growth of 161,000 while retail added 121,000 during the holiday shopping season and construction added 51,000.
Transport and warehouse added 47,000 and healthcare grew 39,000. Wholesale trading also saw a gain of 25,000.
Along with these benefits, reviews came up in the previous months.
The October count rose to 645,000 from the previous estimate of 610,000, while November saw an increase of 91,000 up to 336,000.
The jobs market is relatively flat although economic growth is otherwise looking tough in the fourth quarter. Atlanta Fed’s GDPNow regulator sees the U.S. economy accelerate 8.5% for the last three months of the year, although economists expect the first quarter in 2021 to show more or less growth.