Bleak midwinter for employment
Weekly Bond Commentary
There is no question the job market for many Americans remains grim. But data released last week didn’t paint a well-defined picture of where it is headed, even beyond the typical skew seasonality brings to the holidays. January nonfarm payrolls rose by only 49,000. But that is at least a gain compared to declines in November and December that were revised even lower in the Labor Department survey. This suggests we might be over the hump. Supporting this view is that ADP reported that private sector employment increased by 174,000 jobs from December to January and initial jobless claims decreased to 779,000 the week ending Jan. 30 from 812,000 the previous week. Continuing claims also declined.
Clouding the entire hypothesis is that the unemployment rate fell from 6.7% to 6.3%. That should be cause for celebration. But it was due in part by an increase in people who have been disheartened enough by their job prospects to stop searching for work. Perhaps the best indicator of where the labor market is going is the rise in temporary help. This category often is a window into the direction of economic activity, and businesses brought on a good amount (81,000) of temps in January.
Ultimately, the cloudiness in the data must be placed against the many millions who are still unemployed. That fact is unfortunately still clear as day and the reason that Congress should pass additional stimulus soon, whether it is the Biden plan of $1.9 trillion package or something close.