Economists predict that the US unemployment rate will remain at 6.7% in the first month of 2021, which would be the third consecutive month without any change. Eleven months in the pandemic, ten months in the jobs and nine months in the apparent recovery, this is a very bad sign.
The average expectation for jobs added in January is 50,000. That would be a welcome turnaround due to the 140,000 jobs lost in December, which was the first monthly job loss since April. If the forecast for January holds, America will decline by nearly 10 million jobs since February last year.
Wednesday’s ADP employment report showed that private payrolls rose by 174,000 jobs in January, much larger than economists had expected. And while the ADP report and the government report are not correlated, such a big leap is good for the official figures for jobs.
Coupled with recent positive surveys of the manufacturing and services sectors, there is ‘perhaps … wait for it … an upside risk from Friday’s payroll report’, Jennifer Lee, a senior economist, wrote in a note on Wednesday.
Here is hope.
The Department of Labor reported Thursday that weekly demands for the unemployed fell more than expected in the last week of January, leading to more optimism about the possible positive surprise in Friday’s job report.
All eyes on the vaccination of the vaccine
The U.S. labor market has experienced a huge setback since the economy stalled last year, adding millions of jobs during the summer. Nevertheless, the nation remains in a labor crisis.
According to the Department of Labor, more than 18 million people received some form of government benefit in the week ending January 9th.
Meanwhile, the hospitality and leisure industry, which includes restaurants and all kinds of personal entertainment, is still carrying the bulk of the crisis.
“In fact, the food and beverage sector was the biggest source of the gap between the level of employment and the level of pre-pandemic in December,” Nick Bunker, director of economic research, said in an email. In addition, all the work lost in December was held by women.
The sectors cannot return to normal until the virus is under control or the pandemic ends. Economists – and politicians – are betting that the roll-out of vaccines will be the cure for the economy.
But the rollout is still in its infancy: to date, nearly 33 million doses of vaccine have been administered in the United States, but only 6 million people have received the most important second dose, according to data from the Centers for Disease Control and Prevention.
The Congressional Budget Office said in a report on Monday that the number of American Americans will only be at the pre-pandemic level again in 2024.
President Joe Biden’s plans – including the goal of delivering 100 million doses of coronavirus vaccine in its first 100 days, as well as its proposed $ 1.9 billion stimulus package that will include more aid for the unemployed – could helps to withstand the storm.
But how long it will take the country to fully recover from this labor crisis – it remains the great unknown.
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