Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Bio
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
Bio
X •  LinkedIn
 
  Nonfarm Payrolls Fell 140,000 in December
Posted Under: Data Watch • Employment • COVID-19
Supporting Image for Blog Post

 

Implications:  After seven consecutive months of job gains, the impact of renewed COVID restrictions, which ramped up again in November, are showing up in economic data.  Nonfarm payrolls fell 140,000 in December, lagging the consensus expected gain of 50,000, the first payroll decline since the massive 20.8 million drop in April.  Meanwhile, civilian employment, an alternative measure of jobs that includes small-business start-ups, increased a bare 21,000 in December, the smallest increase since April's complete shutdown. The underlying data was not much of a surprise.  Leisure and hospitality jobs contracted by 498,000 in December, particularly among restaurants & bars, which lost 372,000.  (The two other sectors that held down payroll growth in December were government and education.)  In other words, the data suggest a combination of increased government restrictions on activity related to COVID-19 as well as the effect of colder weather on outdoor dining were the main culprits behind fewer jobs.  However, while the shutdowns garner big headlines, and the impact is predictable, a good portion of industries have learned how to continue operating.  The payroll diffusion index, which reports the percentage of industries gaining jobs minus those losing jobs came in at 61.0% in December (well above the 50% mark where gainers and losers are equal).  Job-gaining sectors included manufacturing, construction, retail trade, wholesale trade, transportation & warehousing, financial activities, professional & business services, and health care.  In other words, this doesn't look anything like a "double-dip" recession.  The other weak news in today's report was that average weekly hours ticked down to 34.7 from 34.8.  However, the loss of jobs among relatively lower-pay workers in the leisure & hospitality sector likely helped push average hourly wages (for those still at work) up 0.8% for the month and 5.1% higher than a year ago.  Combining the figures on hours and wages, total earnings rose 0.4% in December and are only down 0.4% from a year ago.  For comparison, back in April, total earnings were down 8.9% versus April 2019.  Another way to think about it is that total earnings have increased in each of the past eight months and have now recovered 88% of the losses that occurred in March and April.  Note as well that the unemployment rate remained at 6.7% in December as both civilian employment and the labor force both ticked up slightly versus November.  The road to a full recovery remains a long one, but today's soft report is not as reason to worry about 2021. Look for a rebound to job growth in the first quarter and for robust gains in 2021. 

Click here  for PDF version

Posted on Friday, January 8, 2021 @ 11:16 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Search Posts
 PREVIOUS POSTS
2021 Turns Blue
The ISM Non-Manufacturing Index Rose to 57.2 in December
COVID-19 Tracker 01/07/2021
Coronavirus High Frequency Data 01/07/2021
The Trade Deficit in Goods and Services Came in at $68.1 Billion in November
Coronavirus High Frequency Data 01/05/2021
The ISM Manufacturing Index Rose to 60.7 in December
Keeping Good State Policies
M2 and C&I Loan Growth
COVID-19 Tracker 12/29/2020
Archive
Skip Navigation Links.
Expand 20242024
Expand 20232023
Expand 20222022
Expand 20212021
Expand 20202020
Expand 20192019
Expand 20182018
Expand 20172017
Expand 20162016
Expand 20152015
Expand 20142014
Expand 20132013
Expand 20122012
Expand 20112011
Expand 20102010

Search by Topic
Skip Navigation Links.

 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.