United States: Labor market deteriorates in December for the first since April
January 8, 2021
Total non-farm payrolls fell 140,000 in December, and missed market analysts’ expectations of a 71,000 increase. This follows November’s 336,000 payroll rise. Employment in leisure and hospitality and private education fell in December, which was partially offset by increases in the professional and business services, construction and retail sectors.
The unemployment rate was stable at November’s 6.7% in December, while the labor force participation rate was also unchanged at 61.5%. Hourly earnings increased 0.8% month-on-month in December (November: +0.3% mom), while annual wage growth accelerated to 5.1% in December from 4.4% the month prior.
Commenting on December’s jobs report and the short-term outlook on the labor market, Katherine Judge, a senior economist at CIBC Economics, noted:
“With the virus still spreading rapidly, it’s likely that social distancing measures will have to be increased in early 2021, suggesting a challenging first quarter for the labor market and overall US economy. Even with the second round of fiscal stimulus coming to fruition, service closures will weigh on that large portion of consumer spending.”
Author: Steven Burke, Economist