WASHINGTON (AP): US employers shed jobs last month for the first time since April, cutting 140,000 positions, clear evidence that the economy is faltering as the viral pandemic tightens its grip on consumers and businesses.
At the same time, the unemployment rate stayed at 6.7 percent, the first time it hasn’t fallen since April.
Friday’s figures from the Labor Department suggest that employers have rehired roughly all the workers they can afford to after having laid off more than 22 million in the spring — the worst such loss on record. With consumer spending barely growing over the past few months, most companies have little incentive to hire. The economy still has 9.9 million fewer jobs than it did before the pandemic sent it sinking into a deep recession nearly a year ago.
The pandemic will likely continue to weaken the economy through the winter and perhaps early spring. But many economists, along with the Federal Reserve’s policymakers, say they think that once the coronavirus vaccines are more widely distributed, a broad recovery should take hold in the second half of the year. The incoming Biden administration, along with a now fully Democratic-controlled House and Senate, is also expected to push rescue aid and spending measures that could accelerate growth.
For now, the renewed surge in virus cases, as well as cold weather, has caused millions of consumers to avoid eating out, shopping and traveling. Reimposed business restrictions have shut down numerous restaurants, bars, and other venues.
Economists at TD Securities estimate that more than half the states have restricted gatherings to 10 or fewer people, up from about a quarter in September. New York City and California, among others, placed strict new limits on restaurants last month.
In recent months, retailers have been especially hurt by the slump in consumer spending. Debit and credit card data tracked by JPMorgan Chase, based on 30 million accounts, shows that Americans slowed their purchases during the holiday shopping season.
