Whatās Going On Here?Data out on Friday showed the US economy lost 140,000 jobs in December, since there only seems to be one thing on the hospitality industryās menu these days. What Does This Mean?Economists kept their expectations in check heading into the announcement, predicting the US would add a modest 50,000 jobs. But with coronavirus thumbing its nose at the very idea of yuletide generosity, job creation ground to a complete halt. And while the unemployment rate mightāve held steady at 6.7%, it didnāt drop like it had done for the previous seven months either.
Pandemic-driven restrictions have been taking a particular toll on bars and restaurants, which cut nearly half a million positions between them. That goes some way to show how much economic damage the leisure and hospitality industries are having to bear ā especially when you consider that sectors like construction and retail did manage to create new jobs. Why Should I Care?The bigger picture: Keep it coming.
The monthly US jobs report is a good indicator of how the overall economyās doing, so investors tend to pay pretty close attention to it. That said, they seemed to shrug off Decemberās disappointing update with a ābad news is good newsā investment mentality. See, the Democratic victory in the Senate elections last week already makes another coronavirus support package likely to arrive soon. Throw in some demoralizing economic data like this, and the chances that the government will pump more money into the economy just keep rising.
Zooming out: Fooled you.
Europe reported a small drop in its employment rate for the second month in a row, with the number inching down to 8.3% in November. That came as a surprise to economists who had expected it to rise, but they might not be wrong: that figure doesnāt take into account all the people whoāve given up looking for work altogether ā including those who have kids to look after now school closures are back with a vengeance. | 