The US economy shed 140,000 jobs in December, leaving the unemployment rate at a stubbornly high 6.7 per cent and exacerbating fears that the new coronavirus surge is stalling America’s recovery.
It is the first monthly loss of jobs in the US since the early stage of the pandemic in April.
According to the Bureau of Labor Statistics, leisure and hospitality shed 498,000 jobs, making it one of the hardest-hit sectors by far. Government lost 45,000 jobs while education and healthcare services lost 31,000 jobs. However, retailing, manufacturing and construction kept adding new positions.
The data was released by the BLS at the end of a tumultuous week in Washington, with president Donald Trump’s supporters storming the US Capitol in a dramatic siege that threatened America’s political stability.
The latest surge in coronavirus cases has led to new restrictions in several cities and states with fatalities at a record high. But the bleak US jobs markets is expected to receive some relief after Congress agreed a $900bn stimulus package that could help protect the recovery in the first quarter.
The prospect of Democratic party control of the US Senate after it captured two pivotal seats in the upper chamber of Congress has sharply increased the odds of additional stimulus on top of that.
US government bond prices slid following the release, extending a multi-day sell-off that kicked off in earnest after the latest election results. The yield on benchmark 10-year Treasuries climbed 0.01 percentage points to 1.09, its highest level in nearly 10 months. Yields rise as prices fall.
Despite the disappointing figures, S&P 500 futures pointed to a 0.3 per cent rise when trading opens. The blue-chip stock index has seen three straight days of gains, as investors looked past the political turmoil in Washington and instead focused on the additional fiscal stimulus likely to come following Joe Biden’s inauguration later this month.