Economy
U.S. economy loses jobs in December, first decline since April – The Globe and Mail
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The U.S. economy shed jobs for the first time in eight months in December as the country buckled under an onslaught of COVID-19 infections, suggesting a significant loss of momentum that could temporarily stall the recovery from the pandemic. Reuters
The U.S. economy shed jobs for the first time in eight months in December as the country buckled under an onslaught of COVID-19 infections, suggesting a significant loss of momentum that could temporarily stall the recovery from the pandemic.
Non-farm payrolls decreased by 140,000 jobs last month, the U.S. Labour Department said on Friday. Data for November was revised up to show 336,000 jobs added instead of 245,000 as previously reported. That was the first decline in payrolls since April. The economy has recovered just over half of the 22.2 million jobs lost in March and April.
The unemployment rate was at 6.7 per cent in December.
Despite the labour market weakness, the economy is unlikely to fall back into recession, with a backstop of nearly US$900-billion in additional pandemic relief approved by the government last week.
More fiscal stimulus is expected now that the Democrats have gained control of the U.S. Senate, boosting the prospects for president-elect Joe Biden’s legislative agenda. Congress on Thursday formally certified Mr. Biden’s election victory hours after hundreds of President Donald Trump’s supporters stormed the U.S. Capitol.
There is also optimism that the rollout of coronavirus vaccines will be better co-ordinated under the Biden administration. COVID-19 cases in the United States have jumped to more than 21 million, with the death toll exceeding 356,000 since the virus first emerged in China in late 2019, according to the U.S. Centers for Disease Control and Prevention.
Still, the employment report joined a raft of other weak data on consumer confidence and spending in underscoring the virus’ brutal impact on the economy.
“The economy will be on the soft side for the next several months, but with fiscal support and vaccines, the economy should kick into higher gear by summer,” said Mark Zandi, chief economist at Moody’s Analytics in West Chester, Penn.
The economy is believed to have expanded at around a 5-per-cent annualized rate in the fourth quarter, with the bulk of the rise in gross domestic product seen coming from inventory investment. It grew at a historic 33.4-per-cent pace in the third quarter after shrinking at a 31.4-per-cent rate in the April-June period, the deepest since the government started keeping records in 1947.
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Japan’s economy expanded slightly less than initially estimated in the October-December quarter due to weaker-than-expected domestic demand.
The world’s third-largest economy after the U.S. and China grew 2.8% from the previous quarter, the government’s revised data showed Tuesday. That compared with the 3% expansion in a preliminary estimate released in mid-February.
The revised data showed that capital expenditures rose 4.3% from the previous quarter, compared with an initial estimate of a 4.5% increase.
Economists say the country’s gross domestic product will likely decline in the current January-March quarter due to the government’s state of emergency.
Write to Megumi Fujikawa at megumi.fujikawa@wsj.com
Dow Jones Newswires
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* The Toronto Stock Exchange‘s TSX rises 0.60 percent to 18,490.76
* Leading the index were Mullen Group Ltd <MTL.TO>, up 8.0%, Sprott Inc, up 6.5%, and Ero Copper Corp, higher by 5.4%.
* Lagging shares were Lightspeed POS Inc, down 7.4%, Ballard Power Systems Inc, down 5.5%, and Hudbay Minerals Inc, lower by 4.3%.
* On the TSX 138 issues rose and 79 fell as a 1.7-to-1 ratio favored advancers. There were 36 new highs and no new lows, with total volume of 198.4 million shares.
* The most heavily traded shares by volume were Suncor Energy Inc, Air Canada and Cenovus Energy Inc.
* The TSX’s energy group fell 0.89 points, or 0.7%, while the financials sector climbed 5.15 points, or 1.5%.
* West Texas Intermediate crude futures fell 2.13%, or $1.41, to $64.68 a barrel. Brent crude fell 2.06%, or $1.43, to $67.93 [O/R]
* The TSX is up 6.1% for the year.
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