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Weekly economic review & outlook
COVID/lockdowns hit the job market

JAN. 11, 2021

You Need to Know

Week in review

Job losses for the first time since the spring shutdowns

Payrolls dropped by 140,000 for December, caused entirely by cuts in the leisure and hospitality sector. The unemployment rate was unchanged at 6.7 percent.

Business sector growth solid for December

The ISM manufacturing index rose to a two-year high while the ISM services index shook off COVID impacts to post a modest increase, despite employment weakness.

Week Ahead

Forecasts

Consumer inflation should accelerate, boosted by rising energy prices

Growth in the consumer price index has been moderate recently, but we expect that growth picked up for December, led by rising energy prices.

Retail sales expected to decline again

Hurt by the weakening leisure and hospitality sector, growth in retail sales for December is expected to be negative for a third straight month.

Nonfarm payrolls fell by 140,000 for December, the first decline since the record drop for April. The effects of increasing government restrictions on in-person activity in response to record COVID infections were stark. Payrolls in the restaurant sector contracted by 372,000 for December with declines for hotels, recreation, and educational services, as well. These pullbacks offset solid construction, manufacturing, and (perhaps surprisingly) retail hiring, among other positive sectoral gains.

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