Nonfarm payrolls fall by 140,000 in December
US nonfarm payrolls fell by 140,000 in December, according to the Bureau of Labor Statistics, missing market expectations for an increase of 71,000 by a considerable margin.
Last month's decline, driven by a 498,000 drop in employment in the leisure and hospitality sector, follows an increase in November's reading of 336,000.
The report also revealed that the unemployment rate stayed unchanged at 6.7%, while average hourly earnings rose by 0.8% on a monthly basis, compared to analysts' estimate of 0.2%.
Finally, the labour force participation rate remained flat at 61.5% and the average workweek for all employees on private nonfarm payrolls dipped by just 0.1 hours to 34.7 in December
Robert Alster, chief investment officer at Close Brothers Asset Management, said: "After several months of encouraging improvement, the closely watched employment data coming out of the US has significantly slumped. The double whammy of Thanksgiving and Christmas celebrations propelled coronavirus cases and consequently, restrictions were re-introduced in many states, hindering many businesses on the road to recovery.
"With US cases now exceeding twenty-million and the virus surging globally, Biden is confronted with the challenge of achieving an assertive health policy that doesn’t damage the economy further. To do this whilst supporting a nation reeling from the chaos on Capitol hill will be no mean feat after his inauguration on the 20th."