U.S. political uncertainty eases somewhat
U.S. payroll report expected to show labor market weakness
Post-holiday pandemic surge seems to be emergingU.S. political uncertainty eases somewhat — The U.S. stock market on Thursday benefited as U.S. political uncertainty eased somewhat. Congress late Wednesday night certified the Electoral College vote that named Joe Biden as the next president. That was the last official step necessary to make Mr. Biden the next president. Shortly after the certification, the White House released a statement saying “there will be an orderly transition on January 20.”
The next step will be the Inauguration in two weeks on January 20, when Mr. Biden will be sworn in as the new president at noon ET. The Inauguration is unlikely to be disrupted by protesters since the area will heavily protected by police and National Guard forces.
There is also reduced political uncertainty regarding the Senate as Georgia’s Senate seat elections move towards a final count and certification. Mail-in ballots can only be counted if they were mailed before Tuesday’s election day and were received by today. Therefore, a final vote count in the Georgia Senate seat races should be available by this weekend.
There may be demands for recounts and lawsuits for the Georgia elections. However, there apparently won’t be any automatic recounts because both Ossoff and Warnock appear to have won their respective elections by more than the automatic recount threshold of less than 0.5 percentage points.
Incoming Senators Ossoff and Warnock are not expected to be sworn in as new Senators until January 19 at the earliest, and possibly as late as January 22, which is the certification deadline for the Georgia elections. In any case, the earliest that Democrats can take control of the Senate is when Kamala Harris on January 20 is sworn in as the new Vice President and takes over her other role as president of the Senate. If incoming Senators Ossoff and Warnock have been sworn in by then, Democrats will have control of the Senate on January 20.
There are no hard and fast rules about how the Senate will operate with a tied number of seats. Leaders Schumer and McConnell will have to negotiate some type of power-sharing agreement. Mr. McConnell has said that he anticipates a deal close to the power-sharing arrangement that was reached between former Leaders Trent Lott and Tom Daschle when there was a Senate-seat tie in 2001. However, the Senate is now highly polarized and no one seems to be in the mood for compromise, creating the potential for conflict.
As in 2001, Senate Committees could be set up with 50%-50% membership, with any tie votes going to the Senate floor for a vote. However, that will take more time and slow legislation and the approval of nominations in the Senate.
U.S. payroll report expected to show labor market weakness — The consensus is for today’s Dec nonfarm payroll report to show a small increase of +50,000, down sharply from November’s report of +245,000. Today’s expected report of +50,000 would be the weakest report since the labor market recovery began in May.
Wednesday’s Dec ADP report fell by -123,000 jobs, showing a much weaker labor market than expectations of +63,000. The ADP report did not bode well for today’s payroll report.
Although payrolls have recovered by +12.3 million from April’s low, payrolls would have to rise by another 9.8 million jobs to match February’s record high. Payrolls have recovered only 56% of the 22.8 million job loss seen in March and April when the economy was shut down for all but essential activity.
The consensus is for today’s Dec unemployment rate to show a small +0.1 point increase to 6.8%, reversing part of November’s -0.2 decline to 6.7%. That would indicate some backsliding in the labor market because that would be the first increase in the unemployment rate since the labor market recovery began in May.
The U.S. labor market is stalling at its current level as the recent pandemic surge has caused new business restrictions and has caused businesses to become more cautious about hiring. The U.S. labor market is not likely to finish recovering until the pandemic is effectively over and life can return to normal. With the current vaccination rate, normal life is not expected to return until late this year.
Post-holiday pandemic surge seems to be emerging — The number of Covid-related deaths in the U.S. on Thursday surged to a record high of more than 4,000, up from Wednesday’s previous record of 3,915 deaths, according to the Washington Post. The total number of deaths from Covid is now at 363,000.
The number of new Covid cases on Thursday rose to 265,000, the second-highest yet. The Washington Post also reported that there are a record 132,000 people who are hospitalized due to Covid.
The CDC reports that about 5.3 million doses of the vaccine have been given to Americans, which is less than a third of the 17.3 million doses that have been sent to states as of Wednesday, according to reporting by the Washington Post.