The recovery of the labor market that started in May has lost steam and economists predict that the unemployment rate rose to 6.8% between November and December. It would be the first increase in the unemployment rate since April.
Biden wants to resolve the US job crisis with investments in infrastructure and green energy. This could help create long-term jobs – including one million jobs in the automotive industry and 10 million jobs in clean energy, according to Biden’s plan. It could also help with automation by hurting America’s manufacturing jobs and displacing workers.
But the United States also has to deal with a short-term job crisis, and that will be difficult for Biden and Congress to resolve.
America’s economy needs more assistance beyond the stimulus bill that President Donald Trump signed last week. This package expands state unemployment benefits by $ 300 a week through March 14 and adds an 11-week extension to other pandemic unemployment programs created by the CARES Act last spring.
Republicans resisted Democrats’ attempts to raise unemployment insurance, stimulus checks – which Trump also supported – and the aid to states and cities needed to keep countless government officials in their jobs. But with the potential for a so-called blue wave running through the Senate, another larger round of stimulus is becoming more likely. And it is extremely necessary.
Slowing America’s Labor Market Recovery
Economists predict that the recovery of the labor market in the United States was halted in December, stopping well ahead of the labor market strength before the pandemic. Ten months after the start of the pandemic and eight months after the recovery, millions of the Americas remain unemployed and depend on government aid to survive.
The official December employment report, scheduled for Friday at 8:30 am ET, is expected to show that only 71,000 jobs were added last month, which would be the smallest increase since the country began its long road to recovery in May. If the forecast is true, the United States will still have a 9.7 million job decline since the crisis began.
Experts downgraded their forecasts after the ADP jobs report showed that 123,000 jobs in the private sector were lost last month – a much worse than expected report – with most losses in the leisure and hospitality sector.
December expectations fit the trend perfectly, as infections by Covid-19 continue to rise, states impose restrictions and weekly claims for unemployment insurance remain stubbornly high.
“After a milder November employment report and a few weeks of rising unemployment claims, another weak (even slightly negative) impression would probably not be very surprising,” wrote Veronica Clark, economist at Citi (Ç), in a note to customers.
Pandemic-sensitive sectors are at greater risk of losing jobs again due to virus control measures across the country, Clark said. In addition, the retail industry probably did not hire as many seasonal workers for the holiday.
The slowdown is a bad sign for the pace of recovery in 2021 and a major call to action for the new Biden government.
Economists will also be looking for worsening trends with respect to Friday’s report. For example, the number of people who left the labor market completely and therefore were not counted as ‘unemployed’, increased in November. This is worrying because the longer a person is out of a job, the more difficult it becomes for them to return to work.
The more people who fall into this category, the more it will weigh on the recovery of the American economy. That is why dealing with the unemployment crisis is so essential for improving the economy in general.
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