Improved employment / macro outlook expected as corporate America hiring intentions recover and COVID-19’s worst-hit sectors stage a comeback, according to proprietary employment indicator by GlobalData

Corporate demand for labor in the US is turning a corner in January, 2021, registering the fastest monthly growth in over six months, as per GlobalData’s US Hiring Intentions Tracker. Interestingly, this turnaround is led by the sectors that have been worst hit by pandemic-induced lockdowns and restrictions such as the apparel, retail, consumer goods and travel and tourism sectors. This suggests a durable end-demand recovery is possible.

Adarsh Jain, Director of Financial Markets at GlobalData, comments: “While some of the bounce back can be attributable to the holiday season and its after effects, GlobalData believes that a confluence of factors has provided a perfect storm for sustained demand recovery.

“A strong ramp-up in vaccinations, from just under three million in the end of December 2020 to around 23 million in January 2021, combined with an easing of lock-down restrictions and collapsing daily net COVID-19 hospitalization rates have all buoyed consumer sentiment. For example, Refinitiv/Ipsos’ consumer sentiment surged 6% in Jan-2021 – the second highest monthly growth since September 2020. In addition, the US’s new administration’s push on proposed stimulus relief measures should sustain strong demand into 2021”.

Jain notes: “The turnaround in hiring intention suggests initial unlocking of pent-up consumer demand as pandemic concerns recede, as well as corporates ramping up labor resources to capture further release of pent-up demand throughout 2021. Recent better-than-expected jobless claims / continuing claims numbers also suggest improvement in employment trends.

“Net-net, after registering 140,000 job losses, according to December’s NFP employment report, GlobalData expects that January 2021 will see a rebound with positive job additions (the Consensus project saw more than 55,000 additions in January). The data and analytics company notes that the broad-based pickup expected in sectors – especially those worst hit by the pandemic – suggests improved economic outlook ”

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