US Employment Declines for First Time in 8 Months Amid Soaring New York Stock Market

December Job Losses of 140,000...Opposite to Expected Increase of 50,000
US Stock Market Continues to Rise Despite Worsening Employment Market
US Treasury Yield Rises to 1.1%
New York Market Shows No Sign of Stopping Its Rise

[Asia Economy New York=Correspondent Baek Jong-min] In December last year, U.S. jobs turned to a decline. The resurgence of the novel coronavirus infection (COVID-19) dealt a blow to the recovering labor market. Despite concerns about the labor market, the U.S. stock market started strong. The U.S. Treasury yield rose to the 1.1% range.

Monthly Employment Trends in the U.S. Last Year (Source: Department of Labor)

The U.S. Department of Labor announced on the 8th (local time) that nonfarm payrolls decreased by 140,000 in December last year. This was far below market expectations. Considering that the expert forecast compiled by Dow Jones was an increase of 50,000, this is a shocking result.

The Wall Street Journal reported that U.S. jobs have turned from a seven-month increase to a decline.

The cold spell in the labor market had been predicted earlier. Private employment data provider ADP previously reported that employment decreased by 123,000 in December. Even in ADP's data, employment turned to a decline for the first time in eight months.

U.S. jobs had shown steady recovery after more than 20 million jobs disappeared in March and April last year due to the COVID-19 crisis.

On an annual basis last year, the number of jobs lost was 9.37 million. This is the highest record since 1939 and exceeds the combined job losses during the financial crisis in 2008 and 2009.

The December unemployment rate was 6.7%, the same as the previous month, but compared to the 3.5% unemployment rate in the same month last year, which indicated full employment, it still shows that employment recovery is difficult.

The spread of COVID-19, which caused the worsening employment situation, has not stopped. On the 7th, the number of COVID-19 deaths in the U.S. exceeded 4,000 for the first time ever. New confirmed cases also reached 270,000.

The New York Stock Exchange is showing strength despite the worsening labor market. As of 9:40 a.m., the Dow Jones Industrial Average was up 0.2%, the S&P 500 was up 0.5%, and the Nasdaq was up 0.85%.

With the expansion of re-flation trades selling bonds and buying stocks, the 10-year U.S. Treasury yield rose to the 1.1% range on this day.

It is evaluated that the expectation of large-scale stimulus policies anticipated as the U.S. Democrats control the presidency and both houses of Congress is causing a shift from safe assets like bonds to risk assets like stocks. The U.S. Treasury yield entered the 1% range for the first time since March and has been rising daily. The rise in bond yields means a decline in bond prices.

This content was produced with the assistance of AI translation services.