Economists predict that the US unemployment rate was 6.7% in the first month of 2021, which would be the third consecutive month with no changes. Eleven months after the start of the pandemic, ten months after the employment crisis and nine months after the ostensible recovery, this is a very bad sign.
The average expectation of job creation in January is 50 thousand. That would be a welcome turnaround from the 140,000 jobs lost in December, which was the first monthly job loss since April. If the January forecast is confirmed, America will still have dropped nearly 10 million jobs since last February.
Wednesday’s ADP jobs report showed that private payrolls increased 174,000 jobs in January, far more than economists expected. Meanwhile the ADP report and the government report are not correlated, such a big jump bodes well for official job numbers.
Along with recent positive research from the manufacturing and services sectors, “there may actually be … wait … upside risk for this Friday’s payroll report,” wrote BMO senior economist Jennifer Lee on a note on Wednesday.
Here’s the hope.
On Thursday, the Department of Labor reported that weekly unemployment claims fell more than expected in the last week of January, leading to a little more optimism about a potential positive surprise in Friday’s employment report. .
All eyes on the vaccine launch
The US labor market has undergone a tremendous recovery since the economy stopped last spring, adding millions of jobs over the summer. Even so, the country remains in a labor crisis.
More than 18 million people received some kind of government benefit in the week ending January 9, according to the Department of Labor.
Meanwhile, the hospitality and leisure industry – which includes restaurants and all types of personal entertainment – continues to be impacted by the crisis.
“In fact, the food and beverage service sector was the single largest source of the gap between the December employment level and pre-pandemic levels,” said Even economic research director Nick Bunker in comments by and -mail. In addition, all jobs lost in December were occupied by women.
Sectors cannot return to normal until the virus is under control or the pandemic is over. Economists – and politicians – bet that the vaccine launch will be the cure for the economy.
But the launch is still in its infancy: so far almost 33 million doses of vaccines have been administered in the United States, but only 6 million people have received the important second dose, according to data from the Center for Disease Control and Prevention.
The Congressional Budget Office said in a report on Monday that the number of employed Americans will not return to the pre-pandemic level until 2024.
President Joe Biden’s plans – including the goal of delivering 100 million doses of the coronavirus vaccine in its first 100 days, as well as his proposed $ 1.9 trillion stimulus package that would include more aid for the unemployed – may help withstand the storm.
But how long it will take for the country to fully recover from this job crisis – that remains the big question.
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