Friday, 06 Nov 2020 02:00 PM MYTWASHINGTON, Nov 6 — US employers likely hired the fewest workers in five months in October, in what would be clearest indication yet that the end of fiscal stimulus and exploding new Covid-19 infections were sapping momentum from the economic recovery.
“The October jobs report is likely to show evidence of a weakening labour market,” said Dean Baker, senior economist at the Center for Economic and Policy Research in Washington. “This is an urgent problem facing whoever will be in the White House.” A contested election reduces the chances of another coronavirus rescue package from the government this year. Even if more fiscal policy is agreed on, it will likely be smaller than had been anticipated before the election.The US central bank kept interest rates near zero yesterday. Fed Chair Jerome Powell acknowledged the pace of improvement in the economy and labour market had moderated, noting that the recovery would be stronger with more fiscal support.
Even if states and local governments do not impose new restrictions on businesses, consumers are likely to stay away, fearing exposure to the respiratory illness. The United States set a one-day record for new coronavirus cases on Wednesday with at least 102,591 infections, according to a Reuters tally.
A below-forecast payrolls number for October cannot be ruled out. Reports on Wednesday showed hiring by private employers missed expectations by a wide margin last month and employment in the services sector industry slowed. Retailers normally start hiring for the holiday season in October, a practice that was upended by the pandemic. According to economists at JPMorgan, this could throw off the model the government uses to strip out seasonal fluctuations from the data and weigh on nonfarm payrolls.