Business & Investment

Employment conditions look negative and may continue, but economists see the underlying strengths

A lineup of cars for the Los Angeles Regional Food Bank to distribute food outside the church in Los Angeles on November 19, 2020.

Mike Break | Reuters

Nearly 500,000 jobs were lost in December at restaurants, casinos and other businesses most affected by the pandemic expansion, but strong job growth in other areas is the resilience of the labor market. Is shown.

The· Decrease in 140,000 non-farm payrolls In December, it far fell short of what economists expected to increase 50,000 jobs. The unemployment rate remained unchanged at 6.7% and the number of unemployed was 10.7 million.

“This is Covid’s job report with a focus on restaurants, bars and education,” said Diane Swonk, Chief Economist at Grant Thornton. “The school that opened had to close again and the university went online.”

Employment reports show US fatalities Covid-19 reached record 4,000 in a day. Employment reports in December fell for the first time in eight months, according to economists, emphasizing how important it is to speed up vaccination and control the spread of the virus so companies can recover. Employment may decline in January as well.

December unemployment affected up to 372,000 workers in the food service industry and taverns. Employment in casinos and other recreational areas fell by 92,000. Hotels and accommodations decreased by 24,000. After all, the leisure and hospitality industry has lost 3.9 million jobs and 23.2% since February.

Educational employment fell by 63,000 in December, and government employment fell by 45,000.

“Otherwise, the labor market has shown very good resilience, which is the silver backing,” said Michael Gappen, chief US economist at Barclays. “For me, I do point out that if we could control the pandemic by increasing vaccination, these jobs would be revived.”

Economists said the latest stimulus package, including special unemployment benefits and personal checks, should help the economy. And PPP [Paycheck Protection Program] Funds I need to help small businesses. The next bailout package will be approved shortly after Joe Biden’s oath in the presidential election on January 20.

“Current expectations are still sluggish in December, January, and perhaps February,” said Jan Hatius, chief US economist at CNBC at Goldman Sachs. “But in the spring, a very strong recovery is expected.” He said the economy should be helped by better virus news, vaccinations, and more fiscal stimulus.

Hatius said he expects an additional $ 750 billion in bailouts in addition to the latest $ 900 billion.

“This was a resurgence in the case of Covid, and weakening demand did not further reduce us,” Swonk said. “What I’m worried about is that many restaurants and bars may have been completely closed before the stimulus arrived.”

Swonk said the economy is losing momentum, but fighting the effects of the virus is like a marathon, and the economy should be strengthened as it is controlled. “We have to go through the most difficult miles in front of us,” she said.

The positives of the employment report included an increase in employment of 161,000 professional and business services, even though 68,000 were temporary support services. Retailers added 121,000, half of which were general stores such as warehouse clubs and large discount stores. The manufacturing industry increased employment by 38,000 and the construction industry increased by 51,000.

There were also upward revisions to the employment of 135,000 people in October and November.

Wilmington Trust Chief Economist Luke Tilly said one of the major concerns was the serious scars of the economy from long-term unemployment. “If Covid loses most of its work, it will have fewer scars when it is in control. Permanent scars come from two different locations. For those who are not working. Has a very well-known story. It has lost skills for a long time. Another part of the story is whether the company has learned to run with a smaller number of people, “he said. ..

Mr Tilly said the sharp drop in the number of people who consider themselves permanently unemployed is positive. He added that the number fell by 500,000 to 4.2 million, with an increase of 277,000 who consider themselves temporarily unemployed, the first increase since spring.

Employment conditions look negative and may continue, but economists see the underlying strengths Employment conditions look negative and may continue, but economists see the underlying strengths

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