The White House warns that January’s Omicron spike could weigh on employment data next week


Brian Deese, White House’s National Economic Director, spoke at a press conference at the White House in Washington, USA on July 2, 2021.

Kevin Lamarck | Reuters

A surge in Omicron fuel in Covid-19 cases in early January distorts data in next week’s work report as millions of Americans quit their jobs due to illness or family care at the White House on Friday. Warned that there is a possibility.

President Joe Biden’s chief economic adviser, Brian Deese, told CNBC on Friday that the way the Ministry of Labor collects employment data could have a significant impact on January 2022 data, indicating more unemployment. Said there was.

“The way the government samples data is to take snapshots each week,” Dies, director of the National Economic Council, said in an interview about “Closing Bell.”

“And if someone gets sick that week, even if they haven’t been fired, they won’t be considered hired if they haven’t been paid for sick leave,” he added. Americans “need to prepare for January employment data, which may look a bit strange.”

Dís’s comments emphasized uncertainty about employment conditions this month. Economists polled by Dow Jones expect an increase in employment of about 200,000 in January, although some Wall Street analysts expect losses.

The White House will not have access to sensitive economic data, including monthly employment reports, until the day before it is released. Data is often provided to the Council of Economic Advisers and shared with the President.

However, Dís and NEC staff are likely to be conducting their own analysis prior to the release of the Ministry of Labor. When the Bureau of Labor Statistics happens to investigate the employment situation of Americans on peak days of Omicron variant infection, historical data show that net salary fluctuations in January may be lower or even lower than expected. Suggests.

“Given the impact of Omicron in early January and the number of people affected, we expect real fluctuations in the data,” said Dies.

Data that is already publicly available may indicate a tough month for job reports.

The results of the US Census Bureau’s Household Pulse Survey released last week are: More than 14 million Americans weren’t working At some point between December 29th and January 10th, they were either infected with Covid, caring for someone infected with the virus, or caring for a child who wasn’t attending school or day care. is.

“This is twice the number that failed due to a COVID illness in a census conducted in early December, the worst of last year’s pandemic,” said Mark Zandi, chief economist at Moody’s Analytics. Is equivalent to the number of peaks in. ” In a social media post dated January 21st.

“Because of the large number of workers, BLS is likely to report a decline in employment in January. The BLS survey period used to estimate employment for that month overlaps with the census. “He added.

These warnings arise because many Wall Street economists expect January data to turn out to be weaker than the previous month.

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Ian Shepherdson, chief economist at Pantheon Macroenomics, said, “We believe that revisions to the data over the next few weeks prior to the official announcement on February 4 will coincide with a reduction in private salaries of about $ 300,000. I have. ” .20. “But it’s important to understand that all current payroll forecast errors are very large.”

Prolonged pandemics make it harder to collect reliable employment — and The final count after revision is less reflected Than in the pre-pandemic era. The Ministry of Labor has tended to issue larger than usual revisions to reserve employment data over the past two years.

Pandemics also make the job of Wall Street forecasters more difficult, Eroded the value of high expectations. As of Friday, Dow Jones polled economists expect the US economy to add 199,000 jobs in January, while Wells Fargo expects a net reduction in salaries of 100,000. Nomura believes the decline will be about 50,000.

Bank of America economist Aditya Barb said on Tuesday, “Omicron has had a major impact on this month’s labor supply due to worker quarantine. January salaries have a strong downside risk. I see it. ” “Note that more than half of those who did not work because they took care of someone or became infected with Covid have a high school degree or lower. These individuals are likely to be wage workers. There is a significant downside risk to the number of non-farm payrolls in January. Wages. “

The advantage of Wall Street and Washington is that February could be a strong hiring month if those marked unemployed in January return to work.

“Omicron shocks are likely to be short-lived,” Bhave added. “The increase in non-workers concerned about the infection and spread of Covid is very modest compared to the size of the waves, which is generally diminishing headwinds from fear of Covid to labor supply. It suggests that. “

— — CNBC’s Michael Bloom, Nate Rattner, and Steve Liesman contributed to this report.

The White House warns that January’s Omicron spike could weigh on employment data next week

Source link The White House warns that January’s Omicron spike could weigh on employment data next week

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