US non-farm payroll statistics released Friday suggest that 140,000 jobs were lost in December 2020. This is the first net decline since April when 20.7 million jobs were lost.
Non-farm payroll data is released monthly as part of the Bureau of Labor Statistics “Employment Situation Report”, and records the number of jobs in the country excluding farm workers and some other classifications such as Government workers. It is often cited as an indicator for the overall health of the US labour market.
By sector, employment in leisure and hospitality declined hardest, by 498,000 where employment in services, computer systems design and other professional and technical services rose to collect some of the slack.
Long-term unemployment rates (defined as those jobless for 27 weeks or more) are essentially unchanged in December, which means they are still up 2.8 million against February. Young workers were hit particularly hard, with unemployment amongst teenagers reaching 16 per cent.
277,000 more temporary layoffs were recorded in December.
This is a downturn which will likely shake spectator optimism surrounding an eventual post-COVID economic recovery.
Despite the employment data, US markets opened high on Friday afternoon as optimism surrounding the ability of the Democrats to pass stimulus measures grew, as they won both Senate seats available in the Georgia election.
Per New York Times reporting, President-elect Joe Biden has headlined his legislative agenda with the promise of a $2000 (€1632.75) stimulus cheque to individual Americans. As reported by Markets Insider, analysts predict this could see the S&P 500 gain 13 per cent in 2021.
Ultimately, it seems that the prosperity of US financial markets is divorced with that of the labour market. Statistics show that the US unemployment rate for December was 6.7 per cent, with 10.7 million unemployed, which is “nearly twice their pre-pandemic levels in February”. On the other hand, the S&P 500 has seen its value increase by more than ten per cent since February.
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