Poor US NFP spark rumours of extra stimulus – UOB

UOB Group’s Global Economics & Markets Research Alvin Liew reviews the latest US Payrolls figures.

Key Quotes

“The year ended on a disappointing note as US nonfarm payrolls (NFP) decreased for the first time since April 2020, ending seven months of jobs growth. US recorded 140,000 (NFP) job losses in December from an upwardly revised 336,000 in November and well missing the Bloomberg median estimate for an already low 50,000 job creation.”

“The unemployment rate remained steady at 6.7% (unchanged from Nov) as participation rate held at 61.5%.”

“The resurgent COVID-19 infections across the US continues unabated with growing daily fatalities reported thus far in January. While the rollout vaccine is a long term positive and solution to the public healthcare crisis, the unemployment situation will likely remain challenging in the US as the vaccine rollout takes times and tougher restrictions may be re-implemented and even tightened in hotspots, which in turn directly hurts the jobs situation. We think the job losses could persist into January (and maybe even February) and unemployment rate could temporarily inch back above 7% (from the current 6.7%).”

“The silver lining to the disappointing jobs report is that it will add further impetus for US lawmakers to move forward with more fiscal stimulus to cushion the COVID-19 impact for businesses and households.”