Jobs: Sharp Downward Revisions In The US, An Outright Plunge In Canada
The economy created +49k jobs in January, right around expectations. However the report was not nearly as strong as it looked. The employment situation in Canada took quite a grim turn for the worse, losing a huge -213k jobs in January.
Ever since March, Americans have been saving much more of their income than usual. It is expected that as the weather gets warmer, and as Covid becomes more under control, consumers will go on a delightful spending spree.
As we know, the Federal Government has used fiscal stimulus to help support the economy which has been devastated by Covid. Now another round of stimulus, the American Rescue Plan (ARP), is on the table for $1.9 trillion, and if you add those three up you get to $5.2 trillion dollars.
The employment report for December was a nasty surprise. The consensus expectation had been for a gain of 50k jobs, but we had expected there would be a loss in jobs, maybe as much as -50k. Instead it was substantially worse at -140k.
The October 2020 employment report was very strong all around. The economy gained 638,000 jobs vs expectations of 530,000, while the unemployment rate plummeted from 7.9% to 6.9%, much better than expectations of 7.6%.