US personal payroll slips in December for the primary time since April
© Reuters. FILE PHOTO: People line up in front of a Kentucky Career Center hoping to find help with their unemployment claims in Frankfurt
By Lucia Mutikani
WASHINGTON (Reuters) – US private companies unexpectedly laid off workers for the first time in eight months in December as runaway COVID-19 infections sparked a new wave of business restrictions, keeping consumers away from restaurants, bars and other service industry establishments.
The number of private workers fell by 123,000 last month, the national ADP employment report showed on Wednesday. This was the first drop in personal payrolls since April. The November data has been revised slightly lower to show that 304,000 new jobs have been created instead of the originally reported 307,000. Economists polled by Reuters had forecast that the number of private employees would rise by 88,000 in December.
The ADP report is jointly developed with Moody’s (NYSE 🙂 Analytics. Although there is a spotty balance sheet predicting the number of government private payrolls due to methodological differences, clues to labor market health are still being sought.
The report reflected recent weakness in consumer spending and ongoing high layoffs. It highlighted the extent of the economic pain caused by the coronavirus pandemic.
COVID-19 cases in the US have surged to more than 20 million, with the death toll exceeding 347,000 since the virus first appeared in China in late 2019, according to the US Centers for Disease Control and Prevention.
In addition to the virus, the labor market has been constrained by government delays to provide another package of aid to businesses and the unemployed.
More than $ 3 trillion in tax incentives helped companies hire employees and keep others on payroll. It also helped millions of unemployed and underemployed Americans pay bills and keep spending up, leading to record economic growth in the third quarter. Additional government bailouts of nearly $ 900 billion were approved in late December.
The ADP report was released on Friday ahead of the government’s closely watched and comprehensive monthly employment report. According to a Reuters poll of economists, private non-farm workers are likely to have increased by 100,000 jobs in December, after increasing by 344,000 in November.
With the number of people employed in the government expected to have remained unchanged last month, the total non-farm workforce is expected to increase by 100,000 after rising 245,000 in November. That would be the lowest gain since the job recovery began in May and would mean the economy made up about 12.5 million of the 22.2 million jobs lost in March and April.
Several economists believe the economy cut jobs in December, although those dire predictions were contradicted by a poll on Tuesday that found factories to recover in December. Other economists said this suggests employment growth last month, albeit at a much slower pace than in November.
The economic growth estimates for the fourth quarter are at an annual rate of around 5.0%. The economy grew at a historic 33.4% in the third quarter after shrinking 31.4% in April-June. This was the lowest level since government records began in 1947.
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