US Restoration Stalls Amid Coronavirus Spike, Driving Job Losses – Thebritishjournal

The United States lost 140,000 jobs in December as the worsening coronavirus pandemic undermined the economy’s recovery and caused the first loss in employment since April.

The downbeat report released by the Labor Department on Friday confirmed that months of steady gains in hiring were brought to a halt by the recent surge in infections, which saw the one-day death toll reach 4,000 and states scramble to reimpose restrictions on businesses to again bring the virus under control.

“The decline in payroll employment reflects the recent increase in coronavirus (Covid-19) cases and efforts to contain the pandemic,” the report said.

The result was far worse than the modest gain economists forecast, but some analysts had warned the decline was coming.

“The current COVID-19 wave has stopped the recovery in its tracks,” Navy Federal Credit Union economist Robert Frick said.

Until the pandemic is brought under control and vaccine rollout speeds up, “people will not be rushing back to bars and restaurants any time soon,” he said.

While the unemployment rate held steady at 6.7 percent, 10.7 million people remain unemployed — both figures about double the pre-pandemic levels.

Particularly hard hit was the leisure and hospitality sector, which lost 498,000 jobs in December, according to the government.

Black workers have a far higher jobless rate than other groups at 9.9 percent, while the rate for Hispanic workers is 9.3 percent.

The job losses may also have been exacerbated by Congress’s lengthy negotiations over passing another stimulus package to help the economy recover, which concluded in late December when lawmakers finally agreed on a $900 billion stimulus measure.

That law renews pandemic unemployment aid programs into March, and also provides another $284 billion in funding for the Paycheck Protection Program (PPP).

The Treasury Department and Small Business Administration announced Friday that the PPP program will reopen to applications starting Monday, with guidelines to ensure the aid goes first to small businesses.

The program faced intense criticism when large chains or firms with ties to President Donald Trump’s administration were able to draw loans, and the money ran out before many shops and restaurants were able to get help.

The agencies also said they will tighten fraud checks after a stream of prosecutions against individuals accused of stealing tens of millions of dollars from the program.

“We are committed to implementing this round of PPP quickly to continue supporting American small businesses and their workers,” Treasury Secretary Steven Mnuchin said in a statement.

Economists say the new stimulus package offers hope that the hiring slump will reverse, but that will not happen immediately.

Gregory Daco of Oxford Economics describe the labor market as “chilled but not frozen.”

“The worsening health situation and the fact that herd immunity is still months away mean that jobs growth will be tepid in the immediate months ahead,” he said in an analysis.

President-elect Joe Biden is set to take office on January 20, and with his Democratic party in control of both houses of Congress following victories this week in two runoff elections in Georgia, a party leader indicated a new stimulus measure will be among their priorities.

“In addition to securing further funding to crush the virus and put more money into Americans’ pockets, we will finally pass the robust relief that our state and local heroes… need to keep our communities healthy, safe and working,” House Speaker Nancy Pelosi said following the release of the Friday employment data.

The job losses in leisure and hospitality and in private education were partially offset by gains in professional and business services, retail trade and construction, the report said.

The employment gains registered in November were also revised up to 336,000, about 90,000 more than originally reported.

Federal Reserve Vice Chair Richard Clarida in a speech remained optimistic that the recovery would gain traction since the economy responded well to both stimulus from the central bank and fiscal policy.

“The welcome news on the development of several effective vaccines indicates to me that the prospects for the economy in 2021 and beyond have brightened and the downside risk to the outlook has diminished,” he said.

Austan Goolsbee, former chair of the White House Council of Economic Advisers, warned on CNBC that the “awful” jobs numbers highlight “a high danger that we have a double-dip recession.”

US Recovery Stalls Amid Coronavirus Spike, Driving Job Losses The British Journal Editors and Wire Services/ International Business Times.

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