U.S. | Backslide in Employment Not a Sign of Broader Weakening

Summary

Surging Covid-19 cases and increased voluntary and compulsory distancing measures in some areas of the country produced the first drop in nonfarm payrolls (-140K) since April. The year-end fiscal relief package should alleviate some of the pressures on households and businesses.

Key points

• Key points:
• The pandemic’s ongoing effects continue to weigh on the labor market.
• Nonfarm payrolls fall 140K in December after leisure and hospitality jobs plunge by 500K.
• Unemployment rate holds steady at 6.7%.
• Supply-side headwinds will remain until pandemic is under control.

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