WASHINGTON (Reuters) – US private companies unexpectedly laid off workers in December for the first time in eight months as runaway COVID-19 infections unleashed a new wave of trade restrictions, keeping consumers. from restaurants, bars and other establishments in the service sector.
Private payrolls fell 123,000 jobs last month, the ADP National Employment Report showed Wednesday. This was the first decline in private payrolls since April. The November data was revised down slightly to show 304,000 jobs added instead of the 307,000 initially reported. Economists interviewed by Reuters predicted that private payrolls would rise by 88,000 in December.
The ADP report is jointly developed with Moody’s Analytics. Although it has an erratic record of counting private government payrolls due to methodological differences, it is still observed for clues to the health of the job market.
The report reflected a recent weakness in consumer spending and consistently high layoffs. He stressed the extent of the economic pain caused by the coronavirus pandemic.
Cases of COVID-19 in the United States have jumped to over 20 million, with the death toll exceeding 347,000 since the virus first emerged in China in late 2019, according to the U.S. Centers for Control and disease prevention.
In addition to the virus, the labor market has been held back by the government’s delays in delivering another aid package to businesses and the unemployed.
More than $ 3 trillion in tax incentives have helped companies hire workers and keep others on their payrolls. It also helped millions of unemployed and underemployed Americans pay their bills and keep their groceries, leading to record economic growth in the third quarter. Nearly $ 900 billion in additional government bailout money was approved at the end of December.
The ADP report was released Friday ahead of the government’s carefully monitored and comprehensive monthly employment report. According to a Reuters survey of economists, private non-farm payrolls likely increased by 100,000 jobs in December, after rising by 344,000 in November.
With government payrolls expected to remain unchanged last month, overall non-farm payrolls are projected to increase by 100,000 jobs after rising to 245,000 in November. This would be the smallest gain since the job recovery began in May and would mean the economy made up around 12.5 million of the 22.2 million jobs it lost in March and April.
Several economists believe the economy lost jobs in December, although those dire predictions were thwarted by a poll on Tuesday showing factory employment picking up in December. Other economists said this supported employment growth last month, albeit at a significantly slower pace than in November.
Economic growth estimates for the fourth quarter are around 5.0% annualized. The economy grew at an historic rate of 33.4% in the third quarter, after contracting by 31.4% in the April-June period, the deepest since the government began keeping records in 1947.
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama