Wednesday, January 20

The bad employment data in the US fuels doubts about the economic recovery | Economy


Two workers on a General Motors assembly line in Michigan in mid-2019.
Two workers on a General Motors assembly line in Michigan in mid-2019.JEFF KOWALSKY / AFP

December was a bad month, without palliative, for employment in the United States. Donald Trump will leave the White House with the unemployment rate at 6.7%, without large percentage changes in the last bars of 2020, but with a notable decrease of 140,000 jobs in absolute terms. The figures, published this Friday by the Bureau of Labor Statistics of the North American country, represent the first drop to negative since April and fuel doubts about a recovery that does not finish fueling before the constant outbreaks of the coronavirus.

The private sector destroyed 95,000 jobs, while government employment dropped another 45,000 by the wayside in a month in which a minimal (but positive) gain was expected in the labor market. Average wages of workers, meanwhile, increased 0.8% monthly in December and remain 5.1% above the level of a year ago.

2020 was a very difficult year for the US job market. The unemployment rate went from 3.5% in February, shortly before the outbreak of the pandemic – a level that is usually associated with full employment – to 14.7% in April, after lockdowns left millions of workers in a precarious situation. In the last three months of the year it has remained at almost 7%, indicating a stagnation in the labor market.

Unlike in Europe, where governments have launched ambitious job protection programs, the US Administration has chosen to let go: allow the destruction of jobs while offering a temporary subsidy for those affected.

The greatest destruction of employment, in the last month of 2020, was centered in the leisure and hotel sectors, activities very vulnerable to the effects of the pandemic and which lost 498,000 jobs. By contrast, business and professional services added 161,000 jobs, retail added 120,500, and construction added another 51,000 jobs. And the manufacturing sector, which had added 27,000 jobs in November, added another 38,000.

Typically, employment tends to grow in December, when the trade hires temporary staff for the distribution and sale of merchandise during the traditional holiday season, but the increasing number of covid-19 cases and the restrictions on activities adopted in several States make it worse. they have slowed down.

The United States has registered an average of more than 230,000 new daily cases of covid-19 in the past week and on Thursday the daily number of people hospitalized for the disease set a record of 132,476 patients. The North American economic powerhouse has had about 21.4 million cases of covid-19 with 362,828 deaths, according to the Johns Hopkins University data compendium.

The pandemic and the restrictions adopted in the second quarter of 2020 caused the destruction of some 22 million jobs in March and April, and in the following three months employment increased by 9.3 million. The gradual resumption of economic and academic activities since the closings of March have made it possible to recover some 12 million jobs. A major factor in the economic revival during the spring and early summer was the economic stimulus package, worth about $ 2.3 trillion, approved by Congress and signed into law by President Donald Trump in March.

That stimulus included sending checks for 1,200 dollars (980 euros) to millions of taxpayers, an extension of unemployment benefits that included independent workers and contractors, and financial support for companies. The government reported Thursday that in the week ending December 26, the weekly average number of applications, a measure that compensates for weekly variations, was 818,750, compared to 837,500 in the previous week.

Likewise, in the week that ended on December 26, there were 5.07 million people who received this benefit, compared to 5.19 million the previous week. The initial procedures for unemployment benefit increased by 6.8 million in the last week of March, when the impact of the covid-19 pandemic was fully felt, and although they have been gradually decreasing since then, they remain well above the average of 205,000 requests per week in the months leading up to the pandemic crisis.

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