December NFP = -140,000

We had a surprising jobs report this morning. According to the government, the US economy shed 140,000 jobs during the month of December. Prior to this report, there were several economic reports were suggesting this would be a bad job report. They were right. Wall Street had been expecting a loss of 50,000.

The unemployment rate was 6.7%, compared to the 6.8% estimate. An alternative unemployment measures that includes discouraged workers and those holding part-time jobs for economic reasons declined to 11.7% from 12%.

Markets, however, shrugged off the report, likely on the anticipation that it strengthened the case for more stimulus from Congress and reflected a likely temporary reduction in jobs that would be reversed as Covid vaccine distribution accelerated. Stocks were poised for a modest gain at the open.

“In some ways, bad news is good news, because it increases the probability for more stimulus,” said Michael Arone, chief investment strategist for US SPDR Business. “Investors have convinced themselves this week that given what’s happened in Georgia, given the weakness in the economic data, that more help is on the way. We’re going to get more fiscal help, and it’s likely to happen pretty soon.”

The stock market opened higher.

Posted by on January 8th, 2021 at 9:41 am


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