Stock markets rose here and in New York after bad news about job creation in the United States.
The report released today (5) showed the creation of 49 thousand non-agricultural jobs in January. A frustrating number. The average estimate of analysts surveyed by Bloomberg, for example, pointed to the creation of 105 thousand vacancies.
Another negative surprise was the revision of the December figures. They showed the extinction of 140,000 vacancies at the end of 2020 – mainly due to new restrictions established in the cities, to contain the advancement of the coronavirus during the holidays. But, that number was revised (well) upwards: 227 thousand jobs lost. As a result, unemployment there remains at a worrying level by American standards: 6.3%.
Why did the market like the news then? Why sadism? Of course not.
The following happens: since taking office on January 20, Democrat Joe Biden has tried to approve a new $ 1.9 trillion stimulus package. Republican congressmen, however, did not want to approve more than $ 600 billion.
Yesterday (4), the Democrats won in the Senate. By 51 to 50 (thanks to Minerva’s vote by Deputy Kamala Harris), the house approved a draft budget that includes Biden’s stimulus package. Detail that the meeting lasted almost 15 hours with senators reviewing amendments of both parties.
Final approval of the budget, however, still depends on other votes. This is where the “good news” of rising unemployment comes in: it helps to give urgency to the approval of the $ 1.9 trillion in new money. As we have already explained on here, this money that the American government basically prints to inject into the economy ends up draining, and ends up on the stock exchanges. Not only in those there – in the whole world. That is why Ibovespa also responded with joy to the bad news.
Well, almost 40% of people who lost their jobs have been out of work for 27 weeks or more. This group, known as the long-term unemployed, has not changed from December to January. It is just over 4 million. And jobs in the U.S. remain 9.9 million below pre-pandemic levels – even with the more than $ 5 trillion the US government has already launched in the form of stimuli. In other words, the dollar tap should not close anytime soon. Whether they will be the vaccine for the economy is another story.
Sectors that lost most places in the US in January
- Recreation: the hotel business closed 61 thousand jobs, after a brutal drop of 536 thousand in December.
- Social assistance: 40.8 thousand remain.
- Retail business: -37.8 thousand.
- Transport: -27.8 thousand.
- Industry: -10 thousand.