By Geoffrey Smith
Investing.com --- The U.S. labor market suffered its first net loss of jobs in eight months in December, as the surge in Covid-19 cases hit service sectors of the economy hard in the runup to the Christmas holiday.
The Bureau of Labor Statistics said nonfarm employment fell by 140,000 through the middle of the month, compared with expectations for an increase of 71,000. However, the waters were muddied by a big upward revision to hiring in November, where payrolls grew by 336,000, rather than the 245,000 initially reported last month.
The unemployment rate, meanwhile, stayed at 6.7% of the workforce, defying expectations of an increase to 6.8%.
The carnage of lockdown measures was most evident in the hospitality sector, where 372,000 jobs were lost in bars and restaurants nationwide. Another 92,000 were lost in entertainment parks and casinos. That was partly offset by a boom in delivery services as the pandemic forced Christmas shoppers online. Around 37,000 jobs were created for messengers and couriers, while another 59,000 were created in warehouses and other wholesale centers.
The markets reacted by seeing the data as 'bad news but old news'. After an initial dip, Dow Jones Futures were back trading at their pre-release level within 20 minutes. The yield on the 10-Year Treasury bond, which had broken out of a long-standing range to the upside this week on expectations of a big increase in government borrowing, was also little changed, rising two basis points to 1.09%.
The monthly labor report is no longer the key driver that it once was for markets that are focusing overwhelmingly on the spending plans of the new administration and the perceived willingness of the Federal Reserve to keep interest rates at rock-bottom levels.