February 11, 2021
Our guide to notable economic data, forecasts, and analyses. For more information contact Peter Bernstein at pbernstein@rcfecon.com. Additional updates and releases can be found at www.rcfecon.com/research/news-and-press-releases/
- Bureau of Labor Statistics, Employment Situation Summary, January 2021
- Bureau of Labor Statistics, Consumer Price Index Summary, January 2021
- Bureau of Labor Statistics, Job Openings and Labor Turnover, January 2021
- Federal Reserve Bank of New York’s Center for Microeconomic Data, Survey of Consumer Expectations, January 2021
- Record Number of Business Applications Filed in 2020
- Goldman Sachs, Boosts GDP Forecast
- Steep Job Losses Seen for Lower-Wage Workers
- Chart of the Week – Steep Job Losses Seen for Lower-Wage Workers
Data Releases
Bureau of Labor Statistics, Employment Situation Summary, January 2021
The unemployment rate fell by 0.4 percentage point to 6.3 percent in January…Total nonfarm payroll employment changed little in January (+49,000) but is below its February 2020 level by 9.9 million, or 6.5 percent. In January, notable job gains in professional and business services and in both public and private education were offset by losses in leisure and hospitality, in retail trade, in health care, and in transportation and warehousing.
The change in total nonfarm payroll employment for November was revised down by 72,000, from +336,000 to +264,000, and the change for December was revised down by 87,000, from -140,000 to -227,000. With these revisions, employment in November and December combined was 159,000 lower than previously reported. https://www.bls.gov/news.release/empsit.nr0.htm
Bureau of Labor Statistics, Consumer Price Index Summary, January 2021
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in January on a seasonally adjusted basis….Over the last 12 months, the all items index increased 1.4 percent before seasonal adjustment. The gasoline index continued to increase, rising 7.4 percent in January and accounting for most of the seasonally adjusted increase in the all items index. Although the indexes for electricity and natural gas declined, the energy index rose 3.5 percent over the month. The food index rose slightly in January, increasing 0.1 percent as an advance in the index for food away from home more than offset a decline in the index for food at home. https://www.bls.gov/news.release/cpi.nr0.htm
Bureau of Labor Statistics, Job Openings and Labor Turnover, January 2021
The number of job openings was little changed at 6.6 million on the last business day of December…Hires decreased to 5.5 million while total separations were little changed at 5.5 million. Within separations, the quits rate and layoffs and discharges rate were little changed at 2.3 percent and 1.3 percent, respectively. https://www.bls.gov/news.release/pdf/jolts.pdf
Federal Reserve Bank of New York’s Center for Microeconomic Data, Survey of Consumer Expectations, January 2021
The Federal Reserve Bank of New York’s Center for Microeconomic Data released the January 2021 Survey of Consumer Expectations, which shows that households’ year-ahead spending growth expectations rose to 4.2%, the highest level recorded in more than 5 years. In contrast, earnings growth expectations have remained flat for the sixth consecutive month. Labor market expectations continued to improve with higher expectations about job security and job finding. Home price expectations rose again in January to reach their highest level since May 2014. Median inflation expectations were flat at both the short and medium-term horizons, while inflation uncertainty and inflation disagreement remain elevated compared to pre-COVID-19. https://www.newyorkfed.org/newsevents/news/research/2021/20210208
Economic Forecasts and Analyses
Record Number of Business Applications Filed in 2020
Nearly 4.5 million business applications were filed in 2020 — the highest number on record, and an increase of 24% from the year before, according to an analysis of Census data by the Economic Innovation Group. Recessions typically see a drop in business formation as people’s personal assets are wiped out. That businesses are forming at such a high rate indicates underlying optimism about the economy, as well as a potential well of new jobs for people once vaccinations are available. https://www.cbsnews.com/news/business-formation-surged-last-year-confounding-expectations/
Goldman Sachs, Boosts GDP Forecast
Goldman chief economist Jan Hatzius and his colleagues said that additional fiscal measures are likely to be valued at $1.5 trillion, after previously estimating $1.1 trillion. They also bumped their GDP forecast for the second quarter to 11%. On an annual basis, they increased their forecasts for 2021 and 2022 growth by 0.2 percentage points each, to 6.8% and 4.5%, respectively. “While the extra $400 billion in stimulus we assume is equivalent to nearly 2% of GDP, we expect that much of this spending will take several quarters to spend out and therefore has more limited implications for near-term growth.” https://www.bloomberg.com/news/articles/2021-02-08/goldman-sees-relief-bill-at-1-5-trillion-boosts-gdp-estimate?sref=d26H4urJ
Chart of the Week – Steep Job Losses Seen for Lower-Wage Workers
Between February and April 2020, employment declined by more than a third for low-wage workers, compared to a decline of 18 percent for lower-middle wage workers, and nine percent for upper-middle wage workers. By contrast, employment for high-wage workers held steady. The economy returned a substantial number of jobs after bottoming out in April 2020, particularly for low-wage workers. This partial but strong recovery helped narrow the gap between low-wage workers and their higher-paid counterparts. However, employment for the two lower-wage groups began to decline again in October as the winter wave of the virus began, even as jobs for the two higher-wage groups grew, opening up the gap once more. All in all, employment among high-wage workers is now slightly above where it was before the pandemic hit, and employment among both middle-wage groups is just slightly below. By contrast, employment among low-wage workers remains 14 percent below pre-pandemic levels and is trending down again. https://libertystreeteconomics.newyorkfed.org/2021/02/some-workers-have-been-hit-much-harder-than-others-by-the-pandemic.html
