- by New Deal democrat
For the past several weeks, based on the increase in initial jobless claims, I have warned that the December employment report might have a negative number, or at very least a very weak positive. Once again this was an accurate forecast.
There was a strong divergence between the household and establishment reports this month. And to cut to the chase, the only real critical number is the amount of vaccinations administered.
Leading employment indicators of a slowdown or recession
I am still highlighting these because of their leading nature for the economy overall. These were mixed:
Wages of non-managerial workers
Aggregate hours and wages:
Other significant data:
Once again the household and establishment reports strongly diverged. The household report, from which unemployment rates and the number of full time vs. part time workers are taken, showed strong gains, driven by both increased employment and a slight decrease in the number of people in the jobs market. The establishment report, by contrast, showed weak gains or outright losses, depending on the employment sector. What stands out is the huge gains in temporary employment, which is a leading sector, but also strongly suggests that employers are not willing to make permanent commitments in this volatile environment.
But for the vaccines, the December and January reports together would strongly suggest that a “double dip” recession has started, due to the tremendous surge in new COVID cases during the past 3 months. I suspect, however, that competent policy from the Biden Administration and the continuing improvement I the number of vaccines administered daily, plus the onset of warmer weather in spring, will end these week numbers in a month or two.