Employment progress is prone to have recovered in January, however the extent of the restoration will depend upon lodges and eating places

The January employment picture appears to have improved in December, but how much that depends depends in large part on the impact of the virus and restrictions on the troubled hospitality and leisure sectors.

The US Bureau of Labor Statistics will be releasing its January “Employment” report on Friday morning, detailing the unemployment rate and the number of jobs added or lost in the last month.

According to the Dow Jones, economists expect 50,000 employees to be hired in January, down from a decline of 140,000 in December. The unemployment rate is expected to stay at 6.7%.

The latest work-related data has improved, including Thursday’s weekly unemployment claims data, which shows 779,000 first-time applicants. Though it’s still quite large, it was the lowest since Nov. 28, and was below the 830,000 economists expected.

Economists’ projections are wide, with some showing a decline in the total number of employees, but others expecting substantial gains. NatWest economists have raised their negative forecast to the expectation of a profit of 300,000.

“We forecast [an increase of] 200,000. It certainly shows some improvement compared to December when it came down, “said Michelle Meyer, director of US economics at Bank of America Global Research.

“The swing factor should be leisure and hospitality, since that’s where you had the biggest breakdown in the December report,” she said.

In December, 498,000 leisure and hospitality jobs were lost, bringing the total to 3.9 million or 23% of the workforce in the sector. Of the jobs lost in December, 372,000 were in food or drink establishments impacted by Covid restrictions and the impact of cold weather on outdoor eating.

“We believe there was some improved consumer spending activity in January,” said Meyer of Bank of America. “We also saw some incentives … In the first week of January there was a sharp spike in card spending due to incentives.”

The trend was evident in Bank of America’s card data, she said. Data from the bank’s total credit and debit cards showed that spending rose at a pace of about 5.3% in January through January 29.

In the week ending January 16, spending increased 6% year over year. Among the stimulus recipients it rose by 12.7%.

The $ 600 covid bailout was sent to individuals in early January as part of the final $ 900 billion stimulus package approved by Congress.

The increase in spending correlates directly with employment growth, said Meyer.

Less optimism with some

Other economists are less optimistic about last month’s employment growth.

Michael Gapen, chief US economist at Barclays, expects a negative 100,000 payroll.

The number could be better, he said. However, Gapen doesn’t see as much recovery in leisure and hospitality after the big drop in December.

“I think the consensus says it is one of a kind,” he said. “We thought the weakness in leisure and hospitality would last longer.”

However, economists agree that the goods share of the economy should continue to grow, with manufacturing potentially creating jobs.

“I expect labor market momentum to pick up in the coming months. I think overall the January message will not be a real gradual improvement in the January labor market,” said Gapen. “We still have 10 million jobs to restore. An average of 200,000 a month won’t do that. We have to do more than that.”

The labor market, like the economy, depends on the course of the virus and the launch of the vaccine.

Meyer said she was optimistic about growth this year and expects another $ 1 trillion stimulus package. President Joe Biden has proposed $ 1.9 trillion, but it is expected to be cut.

“We see economic growth quite positively,” said Meyer. “We are forecasting GDP growth of 6% this year. This includes the assumption of additional impulses in the spring.”