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The US in December lost 140K non-farm payrolls jobs with the resurgance of Covid-19 as we saw with the weaker ADP report.. Unemployment is recovering after the Coronavirus hit the economy as people return to work. The unemployment rate was unchanged at  6.7% from November.

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December 2020 U.S. Employment Report

The Covid-19 virus has wreaked havoc on the global economy. The world's economy was shut down and much of America has stay at home orders. Jobless claims numbers have been records and unfortunately the story is much worse as people have not all been able to return to work. The May through November reports however were a surprise gain in jobs. The expectation had been for more recovery in job losses for Decemeber until new lockdowns came into affect.

US Jobs Dec 2020

The market expect the December report released Friday to show nonfarm payrolls fall with the recovering economy. The ADP report this week showed Private businesses in the US unexpectedly laid off 123K workers in December of 2020, compared to market forecasts of an increase of 88K. It is the first decline in private-sector employment since April, amid a rise in COVID-19 infections and further lockdowns. The volatile numbers point up how difficult estimating the jobs situation is amid an economy struggling to get back to normal following the coronavirus-inducted shutdown. The national unemployment rate had come off a 50 year low 3.5% with higher participation before the Covid-19 lockdown now to 7.9%.

The concern is that job creation could slow again amid uncertainty with political uncertainty and a rise in Covid-19 cases.

December 2020 US Employment Report Expectations

Employment:

  • Non-farm payrolls  -140,000  vs  +57,000 expected, Prior 245,000 (revised to 336,000 )
  • Unemployment rate 6.7% v 6.7% expected/prior 6.7%
  • Participation rate  61.5% vs 61.6% exp 61.5% prior (63.3% highest since 2014)
  • Underemployment rate   11.75% vs 12.1% Exp 12.0% prior
  • Two month net revision +135k Prior +11k +15k, +145k
  • Manufacturing payrolls  +38k vs +26k exp +27k, +38k, +66k prior
  • Private payrolls -95k vs +65k exp  +344k +906k, +877k prior

Wages:

  • Average hourly earnings +0,8% m/m v  0.2% Expected +0.3% m/m Prior
  • Average hourly earnings  +5.1% y/y v 4.4% Prior Expected
  • Average weekly hours  34.7  v 34.8 Expected/Prior"

Household Survey Data

In December, both the unemployment rate, at 6.7 percent, and the number of unemployed persons, at 10.7 million, were unchanged. Although both measures are much lower than their April highs, they are nearly twice their pre-pandemic levels in February (3.5 percent and 5.7 million, respectively). 

Among the major worker groups, the unemployment rates for teenagers (16.0 percent) and Hispanics (9.3 percent) increased in December. The jobless rates for adult men (6.4 percent), adult women (6.3 percent), Whites (6.0 percent), Blacks (9.9 percent), and Asians (5.9 percent) showed little change.

Among the unemployed, the number of persons on temporary layoff increased by 277,000 in December to 3.0 million. This measure is down considerably from the high of 18.0 million in April but is 2.3 million higher than in February. The number of permanent job losers declined by 348,000 to 3.4 million in December but is up by 2.1 million since February. The number of unemployed reentrants increased by 282,000 to 2.3 million over the month, 452,000 higher than in February. 

In December, the number of persons jobless less than 5 weeks increased by 449,000 to 2.9 million, while the number of persons jobless 15 to 26 weeks declined by 303,000 to 1.6 million. The number of long-term unemployed (those jobless for 27 weeks or more), at 4.0 million, was essentially unchanged in December but has increased by 2.8 million since February. The number of those jobless for 27 weeks or more accounted for 37.1 percent of total unemployed in December. (See table A-12.) The labor force participation rate and the employment-population ratio were both unchanged over the month, at 61.5 percent and 57.4 percent, respectively. These measures are up from their recent April lows but are lower than in February by 1.8 percentage points and 3.7 percentage points, respectively. 

The number of persons employed part time for economic reasons, at 6.2 million, decreased by 471,000 over the month. This measure is down from its April high of 10.9 million but is 1.8 million higher than the February level. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs. (See table A8.) In December, the number of persons not in the labor force who currently want a job, at 7.3 million, was little changed over the month but is 2.3 million higher than in February. These individuals were not counted as unemployed because they were not actively looking for work during the last 4 weeks or were unavailable to take a job. 

Among those not in the labor force who currently want a job, the number of persons marginally attached to the labor force, at 2.2 million, changed little in December but is up by 749,000 since February. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, was essentially unchanged at 663,000 in December but is up by 262,000 since February. 

Household Survey Supplemental Data

In December, 23.7 percent of employed persons teleworked because of the coronavirus pandemic, up from 21.8 percent in November. These data refer to employed persons who teleworked or worked at home for pay at some point in the last 4 weeks specifically because of the pandemic.

In December, 15.8 million persons reported that they had been unable to work because their employer closed or lost business due to the pandemic—that is, they did not work at all or worked fewer hours at some point in the last 4 weeks due to the pandemic. This measure is 1.0 million higher than in November. Among those who reported in December that they were unable to work because of pandemic-related closures or lost business, 12.8 percent received at least some pay from their employer for the hours not worked, little changed from November.

Among those not in the labor force in December, 4.6 million persons were prevented from looking for work due to the pandemic. This measure is up from 3.9 million in November. (To be counted as unemployed, by definition, individuals must be either actively looking for work or on temporary layoff.)

These supplemental data come from questions added to the household survey beginning in May to help gauge the effects of the pandemic on the labor market. The data are not seasonally adjusted. Tables with estimates from the supplemental questions for all months are available online at www.bls.gov/cps/effects-of-the-coronavirus-covid-19-pandemic.htm

Establishment Survey Data Total nonfarm payroll employment declined by 140,000 in December. Employment declines in leisure and hospitality, private education, and government were partially offset by gains in professional and business services, retail trade, construction, and transportation and warehousing. In December, nonfarm employment was below its February level by 9.8 million, or 6.5 percent. 

In December, employment in leisure and hospitality declined by 498,000, with three-quarters of the decrease in food services and drinking places (-372,000). Employment also fell in the amusements, gambling, and recreation industry (-92,000) and in the accommodation industry (-24,000). Since February, employment in leisure and hospitality is down by 3.9 million, or 23.2 percent. Employment in private education decreased by 63,000 in December. Employment in the industry is down by 450,000 since February. Government employment declined by 45,000 in December.

Employment in the component of local government that excludes education declined by 32,000, and state government education lost 20,000 jobs. Federal government employment increased by 6,000. Since February, government employment overall is down by 1.3 million. Other services lost 22,000 jobs in December, with over half of the loss in personal and laundry services (-12,000). Employment in the other services industry is down by 453,000 since February. In December, employment in professional and business services increased by 161,000, with a large gain in temporary help services (+68,000). Job growth also occurred in computer systems design and related services (+20,000), other professional and technical services (+11,000), management of companies and enterprises (+11,000), and business support services (+7,000). Employment in professional and business services is down by 858,000 since February. 

Retail trade added 121,000 jobs in December, with nearly half of the growth occurring in the component of general merchandise stores that includes warehouse clubs and supercenters (+59,000). Job gains also occurred in nonstore retailers (+14,000), automobile dealers (+13,000), health and personal care stores (+10,000), and food and beverage stores (+8,000). Employment in retail trade is 411,000 lower than in February. 

Construction added 51,000 jobs in December, but employment in the industry is 226,000 below its February level. In December, employment rose in residential specialty trade contractors (+14,000) and residential building (+9,000), two industries that have gained back the jobs lost in March and April. In December, employment also increased in nonresidential specialty trade contractors (+18,000) and in heavy and civil engineering construction (+15,000). 

Employment in transportation and warehousing rose by 47,000 in December, largely in couriers and messengers (+37,000). While employment in transportation and warehousing overall is 89,000 lower than in February, employment in couriers and messengers has increased by 222,000 over the same period. In December, employment also grew in warehousing and storage (+8,000) and in truck transportation (+7,000), while transit and ground passenger transportation lost 9,000 jobs. In December, health care added 39,000 jobs. Employment growth in hospitals (+32,000) and ambulatory health care services (+21,000) was partially offset by declines in nursing care facilities (-6,000) and community care facilities for the elderly (-5,000). Health care employment is 502,000 lower than in February. 

In December, manufacturing employment increased by 38,000, with gains in motor vehicles and parts (+7,000), plastics and rubber products (+7,000), and nonmetallic mineral products (+6,000). By contrast, miscellaneous nondurable goods manufacturing lost 11,000 jobs over the month. Despite gains over the past 8 months, employment in manufacturing is 543,000 below its February level. 

Wholesale trade employment rose by 25,000 in December but is down by 251,000 since February. In December, job gains occurred in durable goods (+11,000) and nondurable goods (+11,000). In December, employment changed little in other major industries, including mining, information, and financial activities. 

In December, average hourly earnings for all employees on private nonfarm payrolls increased by 23 cents to $29.81. Average hourly earnings of private-sector production and nonsupervisory employees increased by 20 cents to $25.09. These increases largely reflect the disproportionate number of lowerpaid workers in leisure and hospitality who went off payrolls, which put upward pressure on the average hourly earnings estimates. 

The average workweek for all employees on private nonfarm payrolls declined by 0.1 hour to 34.7 hours in December. In manufacturing, the workweek was unchanged at 40.2 hours, and overtime increased by 0.1 hour to 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 34.2 hours. 

The change in total nonfarm payroll employment for October was revised up by 44,000, from +610,000 to +654,000, and the change for November was revised up by 91,000, from +245,000 to +336,000. With these revisions, employment in October and November combined was 135,000 more than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.) 

The Employment Situation for January is scheduled to be released on Friday, February 5, 2021, at 8:30 a.m. (ET). 

December 2021 ADP U.S. Employment Report

Private businesses in the US unexpectedly laid off 123K workers in December of 2020, compared to market forecasts of an increase of 88K. It is the first decline in private-sector employment since April, amid a rise in COVID-19 infections and further lockdowns.

United States ADP Employment Change

  • The service-providing sector shed 105K jobs led by leisure and hospitality (-58K), trade, transportation & utilities (-50K), other services (-12K), and information (-6K).
  • Professional and business companies added 12K jobs, education and health 8K, and financial activities 2K.
  • The goods-producing sector lost 18K jobs, due to manufacturing (-21K) while natural resources and mining neither hired or fired people while the construction sector added 3K jobs.
  • Private payrolls in large companies were down by 147K and small firms shed 13K while midsized ones added 37K jobs.
  • Considering full 2020, private-sector employment decreased by 9.49 million, compared to a 1.79 million gain in 2019.

The ADP estimate, done in conjunction with Moody’s Analytics, has varied widely from the government’s official nonfarm payrolls report, particularly during the pandemic. 

Jobless Claims for the week ending January 2 2021

SEASONALLY ADJUSTED DATA In the week ending January 2, the advance figure for seasonally adjusted initial claims was 787,000, a decrease of 3,000 from the previous week's revised level. The previous week's level was revised up by 3,000 from 787,000 to 790,000. The 4-week moving average was 818,750, a decrease of 18,750 from the previous week's revised average. The previous week's average was revised up by 750 from 836,750 to 837,500.

  • Initial jobless claims decreased by 137,000 for the week ending January to 787,000.
  • Continuing claims for the week ending December 26 decreased by 147,000 to 5.200 million.

United States Initial Jobless Claims

About 161 thousand people applied for help from the Pandemic Unemployment Assistance scheme, which covers workers that do not qualify for initial claims, compared with 310 thousand in the previous period

The highest insured unemployment rates in the week ending December 19 were in Puerto Rico (7.8), Alaska (6.4), California (6.0), Kansas (5.9), Nevada (5.6), Illinois (5.5), New Mexico (5.5), Pennsylvania (5.2), Washington (5.1), and District of Columbia (4.6).

The largest increases in initial claims for the week ending December 26 were in New York (+10,318), California (+10,071), Kentucky (+4,341), Missouri (+4,105), and New Jersey (+2,851), while the largest decreases were in Illinois (-34,568), Pennsylvania (-9,026), Georgia (-7,713), Kansas (-3,710), and Texas (-3,531).

 

Challenger, Gray & Christmas December Job Cuts Report

US based employers announced 77,030 job cuts in December of 2020, up 18.9% from 64,797 in November. The fourth quarter saw the fewest job redundancies last year, with 222,493, down from 497,215 in the third quarter.

United States Challenger Job Cuts

“In the final months of the year, companies that may have survived the initial impact of the pandemic in March and April determined staffing adjustments based on increasingly difficult market conditions. While some segments were up, such as warehousing, shipping, financial, and some manufacturing segments, many others were hurt considerably, chief among them Hospitality, Entertainment, and Leisure,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.

Considering full 2020, companies announced a record high of 2.304 million job cuts, due to the coronavirus pandemic. It compares with 592,556 cuts announced in 2019.

November 2020 U.S. Employment Report

US Jobs Nov 2020

November 2020 US Employment Report Expectations

Employment:

  • Non-farm payrolls  +245,000 vs 470,000 expected, Prior 638,000 (revised to 610,000 )
  • Unemployment rate  6.7% v 6.8% expected/prior 6.9%
  • Participation rate  61.5% vs 61.6% exp 61.7% prior (63.3% highest since 2014)
  • Underemployment rate   vs 12.1% Exp 12.1% prior
  • Two month net revision  +11k Prior +15k, +145k
  • Manufacturing payrolls  +27k vs +26k exp +38k, +66k prior
  • Private payrolls +344k vs +855k exp +906k, +877k prior

Wages:

  • Average hourly earnings  +0.3% m/m v  0.2% Expected +0.2% m/m Prior
  • Average hourly earnings  +4,4% y/y v 4.5% Prior Expected
  • Average weekly hours   34.8 v 34.8 Expected/Prior

Goldman Sachs US November Jobs Forecast

  • - NFP+450K
  • - Unemployment 6.8%
  • "The breadth and severity of the virus resurgence suggests a larger labor market impact"
  • "Increase in household employment and a pause in the labor force participation rebound"

 Household Survey Data

In November, the unemployment rate edged down to 6.7 percent. The rate is down by 8.0 percentage points from its recent high in April but is 3.2 percentage points higher than it was in February. The umber of unemployed persons, at 10.7 million, continued to trend down in November but is 4.9 million higher than in February.

Among the major worker groups, the unemployment rate for adult women (6.1 percent) declined in November. The jobless rates for adult men (6.7 percent), teenagers (14.0 percent), Whites (5.9 percent), Blacks (10.3 percent), Asians (6.7 percent), and Hispanics (8.4 percent) showed little or no change.

Among the unemployed, the number of persons on temporary layoff decreased by 441,000 in November to 2.8 million. This measure is down considerably from the high of 18.1 million in April but is 2.0 million higher than its February level. The number of permanent job losers, at 3.7 million, was about unchanged in November but is 2.5 million higher than in February.

In November, the number of long-term unemployed (those jobless for 27 weeks or more) increased by 385,000 to 3.9 million, accounting for 36.9 percent of the total unemployed, while the number of persons jobless 15 to 26 weeks declined by 760,000 to 1.9 million. The number of persons jobless 5 to 14 weeks and persons jobless less than 5 weeks showed little change in November at 2.4 million and 2.5 million, respectively.

The labor force participation rate edged down to 61.5 percent in November; this is 1.9 percentage points below its February level. The employment-population ratio, at 57.3 percent, changed little over the month but is 3.8 percentage points lower than in February. 

In November, the number of persons who usually work full time rose by 752,000 to 124.3 million, while the number of persons who usually work part time decreased by 779,000 to 25.4 million.

The number of persons employed part time for economic reasons was about unchanged over the month at 6.7 million but remains 2.3 million higher than the February level. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs. This group includes persons who usually work full time and persons who usually work part time. 

In November, the number of persons not in the labor force who currently want a job increased by 448,000 to 7.1 million; this measure is 2.2 million higher than in February. These individuals were not counted as unemployed because they were not actively looking for work during the last 4 weeks or were unavailable to take a job. 

Among those not in the labor force who currently want a job, the number of persons marginally attached to the labor force, at 2.1 million, changed little in November. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, was 657,000 in November, little changed from the previous month.

Household Survey Supplemental Data

In November, 21.8 percent of employed persons teleworked because of the coronavirus pandemic, up from 21.2 percent in October. These data refer to employed persons who teleworked or worked at home for pay at some point in the last 4 weeks specifically because of the pandemic.

In November, 14.8 million persons reported that they had been unable to work because their employer closed or lost business due to the pandemic—that is, they did not work at all or worked fewer hours at some point in the last 4 weeks due to the pandemic. This measure is little changed from October. Among those who reported in November that they were unable to work because of pandemic-related closures or lost business, 13.7 percent received at least some pay from their employer for the hours not worked, up from 11.7 percent in October.

About 3.9 million persons not in the labor force in November were prevented from looking for work due to the pandemic. This measure is up from 3.6 million in October. (To be counted as unemployed, by definition, individuals must either be actively looking for work or on temporary layoff.)

These supplemental data come from questions added to the household survey beginning in May to help gauge the effects of the pandemic on the labor market. The data are not seasonally adjusted. Tables with estimates from the supplemental questions for all months are available online at www.bls.gov/cps/effects-of-the-coronavirus-covid-19-pandemic.htm.

Establishment Survey Data

Total nonfarm payroll employment rose by 245,000, following gains of larger magnitude in the prior 6 months. In November, nonfarm employment was below its February level by 9.8 million, or 6.5 percent. Notable job gains occurred over the month in transportation and warehousing, professional and business services, and health care. Employment declined in government and retail trade.

Employment in transportation and warehousing rose by 145,000 in November but is 123,000 below its February level. In November, employment rose by 82,000 in couriers and messengers and by 37,000 in warehousing and storage; since February, employment in these industries has increased by 182,000 and 97,000, respectively.

Job growth also occurred over the month in truck transportation (+13,000). In November, employment in professional and business services increased by 60,000, with about half the gain occurring in temporary help services (+32,000). Job growth also occurred in services to buildings and dwellings (+14,000).

Employment in professional and business services is down by 1.1 million since February. Health care added 46,000 jobs in November, with gains occurring in offices of physicians (+21,000), home health care services (+13,000), and offices of other health practitioners (+8,000). Nursing care facilities continued to lose jobs (-12,000). Health care employment is 527,000 lower than in February. Construction gained 27,000 jobs in November, but employment is 279,000 below its February level. In November, employment rose in residential specialty trade contractors (+14,000) and in heavy and civil engineering construction (+10,000). In November, manufacturing employment increased by 27,000.

Job gains occurred in motor vehicles and parts (+15,000) and in plastics and rubber products (+5,000). Employment in manufacturing was 599,000 lower than in February. Financial activities added 15,000 jobs in November. Gains occurred in real estate (+10,000) and in nondepository credit intermediation (+8,000). Financial activities has added 164,000 jobs over the past 7 months, but employment in the industry is 115,000 lower than in February. Employment in wholesale trade continued to trend up in November (+10,000) but is 281,000 lower than in February. Government employment declined for the third consecutive month, decreasing by 99,000 in November. A decline of 86,000 in federal government employment reflected the loss of 93,000 temporary workers who had been hired for the 2020 Census.

Employment in local government education continued to trend down (-21,000). In November, retail trade lost 35,000 jobs, reflecting less seasonal hiring in several retail industries. Employment decreases occurred in general merchandise stores (-21,000); sporting goods, hobby, book, and music stores (-12,000); electronics and appliance stores (-11,000); and health and personal care stores (-8,000). By contrast, furniture and home furnishings stores and automobile dealers added 6,000 jobs and 4,000 jobs, respectively. Employment in retail trade is 550,000 lower than in February.

Employment in leisure and hospitality changed little in November (+31,000) but is down by 3.4 million since February. Arts, entertainment, and recreation added 43,000 jobs in November, while employment in food services and drinking places changed little (-17,000). Employment in other major industries, including mining, information, and other services, showed little change in November. In November, average hourly earnings for all employees on private nonfarm payrolls increased by 9 cents to $29.58. Average hourly earnings of private-sector production and nonsupervisory employees increased by 7 cents to $24.87.

The average workweek for all employees on private nonfarm payrolls remained unchanged at 34.8 hours in November. In manufacturing, the workweek decreased by 0.2 hour to 40.3 hours, and overtime decreased by 0.1 hour to 3.1 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 34.2 hours.

The change in total nonfarm payroll employment for September was revised up by 39,000, from +672,000 to +711,000, and the change for October was revised down by 28,000, from +638,000 to +610,000. With these revisions, employment in September and October combined was 11,000 more than previously reported.

(Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.) 

The Employment Situation for December is scheduled to be released on Fri january 8, 2021 at 8.30 am

 

Source: AFP, Challenger, DOL, TradersCommunity Data, BLS

From The TraderCommunity Research Desk

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