Friday, January 08, 2021

Economy drops 140,000 jobs in December

"The economy shed 140,000 jobs in December, a clear indication that the pandemic’s chokehold on economic activity strengthened in the final weeks of last year," Martha C. White reports for NBC News. "In the final jobs report of 2020, Friday’s monthly employment snapshot from the Bureau of Labor Statistics shows a labor market teetering on the brink at the end of a tumultuous year."

The unemployment rate held steady at 6.7 percent; it should be noted that figure only includes people who have actively sought work within the past four weeks; those who become discouraged and leave the labor force don't count. The unemployment rate "really hides the drop in active populations of people [who] have stopped looking for a job, because they know in their sector there might not be any jobs," Ludovic Subran, chief economist at Allianz SE, told White.

"Economists say the numbers lay bare the struggles facing American workers, and represent a mandate for President-elect Joe Biden's administration to accomplish two things: Address the immediate financial needs of these households, and develop a longer-term solution that fosters job growth and protects the workers most vulnerable to disenfranchisement," White reports. "Economists had predicted that worsening Covid-19 infection rates in the winter months could damage economic recovery, even as the promise of a vaccine has spurred hope on Wall Street and propelled the stock market to record highs. President Donald Trump has treated the stock market as a barometer of his term and a proxy for success. Observers predict that Biden will view the nation’s economic health through a markedly different lens."

Though a Democrat-dominated White House and Congress likely means more generous stimulus legislation, economists and business leaders agree that Americans need more than checks. Shovel-ready government projects that need workers could help in much the same way the Works Progress Administration did during FDR's presidency. "One obvious entry point with the potential to draw bipartisan support is infrastructure investment, since years of kicking the can down the road have left roads, railways and bridges around the nation in need of repair," White reports.

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