December 10th, U.S. Department of Labor released data that the number of first-time jobless claims in the United States surged to 853,000 last week, 137,000 more than the previous week, far more than market expectations, and the highest level since September, indicating the expanded restrictions imposed to contain the coronavirus epidemic.
Measures may set off a new wave of unemployment. The analysis believes that with the recent series of labor market data generally performing poorly, the pressure on the U.S. Congress is increasing. If a new bailout bill is not introduced before the end of the year, the possible economic and livelihood consequences of the “bail” will be terrible.
853,000! The number of first-time unemployment claims in the United States last week reached the highest in September.
Data released by the U.S. Department of Labor on December 10 showed that 853,000 first-time jobless claims in the United States in the week ended December 5 were 853,000, far more than the market expected 725,000, and 137,000 more than the revised 716,000 in the previous week.
The coronavirus pandemic has hit the U.S. labor market, with the worst unemployment in March and April. The labor market has improved since May as the U.S. economy restarts. However, as the recent COVID-19 epidemic worsens, the number of first-time jobless claims every week remains high. The report of 853,000 people, the highest level since September, indicates that the shutdown of enterprises and business restrictions to curb the coronavirus epidemic may set off a new wave of unemployment.
Bloomberg analyzed that the number of first-time jobless claims in the United States remains three to four times the pre-epidemic level, and now that new restrictions on catering and other people are in close contact with industries due to the worsening of the epidemic may lead to a sustained sluggish labor market recovery in the coming weeks. Although the first vaccinations implemented this month may help curb the spread of the epidemic and ease restrictions, it will take months for the vaccine to be widely available, and the short-term effect is limited.
According to data from the U.S. Department of Labor, the number of people who continued to apply for unemployment benefits in the United States in the week ending November 28 was 5.757 million, far more than the market expectation of 5.21 million, an increase of 230,000 from the previous week, and the first increase since August.
“Overall, the trend of employment growth is clearly slowing down.” Jay Bryson, chief economist of Wells Fargo Securities, said, “Obviously, we have lost the momentum of the job market recovery.”
The number of unemployed is high, and the number of new jobs is low.
Multiple data perform poorly
The latest unemployment data in the U.S. Department of Labor’s report shows that the labor market started poorly in early December, which will be reflected in the monthly employment report in December.
Previous employment reports showed that the number of new non-farm jobs in the United States in November was 245,000, which was lower than the expectations of 440,000 by economists and far lower than the 610,000 in October, the lowest level in seven months, indicating that the overall employment growth is weak.
According to the analysis of the Wall Street Journal based on the employment report, the current number of jobs in the United States is 9.8 million lower than in February before the outbreak. Although the unemployment rate fell from 6.9% to 6.7% in November, it is due to the decline in the number of people looking for jobs, which reflects people giving up employment or staying at home to take care of.
The middle child is forced to withdraw from the labor market.
Some analysts worry that the current situation may be even worse than what is described in the employment report. Since the above employment report only covers the first two weeks of November, the number of confirmed cases, hospitalizations and deaths of COVID-19 has been rising since then, and colder weather has also hit enterprises that rely on people to go out, such as catering enterprises.
These latest negative effects are not reflected in the November employment report, so the market needs to refer to the more frequently published data.
Currently, restaurant booking data for online bookings website OpenTable are down significantly since early November, while the number of hourly workers at restaurants, retailers and other small businesses is declining, according to Homebase, a job scheduling software company.
The latest data released for first-time unemployment benefits also shows the pessimistic picture of the job market, which further exacerbates market concerns.
For the market, investors generally hope that a series of underperforming employment data will put pressure on members of Congress to push for a new round of rescue measures to be introduced as soon as possible. In addition, the market is also paying attention to the movement of the central bank. Federal Reserve officials will meet in December, when they may be inclined to strengthen their support for the economy.
Their measures may include promising to continue to buy U.S. Treasury bonds and mortgage-backed securities, and may also tilt asset purchase plans as much to longer-term securities as possible in an effort to control the long-term. Interest rate.
Relief measures are still pending.
“Rescue the cliff” panic is coming
After the latest data from the U.S. Department of Labor, Bloomberg economist Eliza Wenger said: “The surge in the number of first-time jobless claims is in line with our expectations that the next employment report is likely to show a negative employment situation, which greatly increases the need for an immediate new round of fiscal stimulus to support the economy. “
However, as congressional Democrats and Republicans are still playing fiercely, the bipartisan differences still exist, and a new round of relief measures is still pending. If the bailout bill fails to be introduced before the end of the year, millions of Americans will start the new year without complete unemployment benefits. At the same time, as the previous bailout measures have expired, the potential “slief cliff” effect will directly drag down the economic recovery.
Reuters survey of economists shows that U.S. economic growth will lose momentum in this quarter and next quarter. In the survey from November 30 to December 8, economists lowered their estimates of growth prospects for the current quarter and the first quarter next year. Some of the respondents predict that the U.S. economy will bottom out again, and the economy may shrink again in the first quarter of next year.
“We expect the worsening of the coronavirus pandemic to weaken growth in the first few months of 2021, followed by further financial support from the incoming new government to cope with the increase in hospitalizations.” Alan Zentner, chief economist of Morgan Stanley, said, “The downside risks mainly come from the epidemic, especially in the absence of further fiscal stimulus.
If there are more extensive lockdown measures in winter and the vaccine process is delayed, the economic recovery will be longer, which will lead to longer unemployment. Period and more jobs are lost.”