Despite the expected additional 50,000 jobs last month, ADP reported in a December report that 123,000 jobs had been lost. The labor market has shown signs of weakening in recent months as the number of cases of Covid-19 remains high. As long as this pandemic rages and vaccinations remain slow, the economy will continue to struggle.
Economists are currently estimating the range of -50,000 to +302,000 for tomorrow’s government employment reports. Whether the result is positive or negative, one item remains clear. The stock market is not an economy.
The market is already looking ahead to the summer and beyond, and 2021 is expected to look better than 2020 and make stocks more attractive. In addition, the Fed will continue to print funds and buy corporate bonds at unprecedented rates. The market is flooded with cash begging for spending while interest rates are very low.
Meanwhile, labor market participation remains low and the unemployment rate could exceed 7% since the December results. In reality, the unemployment rate is much higher, including underemployed, and workers are no longer counted because they stopped looking for a job. These numbers are well above the 20% we saw in April, but it’s disappointing to see the labor market weaken again after eight months of preparation.
Ultimately, unemployment will once again affect market sentiment. Traders will probably see tomorrow’s results, choke it again pandemicly, and shrug it as the vaccine news continues to unfold. This process has been going on for months and helps to visually see how wealth gaps are created in real time. Those who can use it will be willing, and those who cannot use it will remain stagnant and delayed because of themselves.
The next Biden administration argues that infrastructure is a priority, providing a large number of jobs and helping the economy move again. A similar plan was used during the inauguration of President Obama after the Great Depression with positive results.
The pandemic needs to be resolved before the major projects can be started, but advances in vaccines have provided little hope for that purpose. As with other reports, economic data can move markets quickly, so traders need to be prepared for rising volatility.It is important to adopt appropriate risk management techniques such as protection Stop loss order..
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How Does Weak Employment Affect the Market?
https://ninjatrader.com/blog/how-will-weak-employment-numbers-impact-markets/ How Does Weak Employment Affect the Market?