U.S. sheds 1.4 lakh jobs as COVID-19 cases surge

The U.S. economy shed jobs for the first time in eight months in December as the country buckled under an onslaught of COVID-19 infections, suggesting a significant loss of momentum that could temporarily stall recovery from the pandemic.Non-farm payrolls decreased by 1,40,000 jobs last month, the Labor Department said on Friday. Data for November was revised up to show 3,36,000 jobs added instead of 2,45,000 as previously reported. Backstop bufferThe economy has recovered just over half of the 22.2 million jobs lost in March and April.The unemployment rate was at 6.7% in December.Despite the labour market weakness, the economy is unlikely to fall back into recession, with a backstop of nearly $900 billion in additional pandemic relief approved by the government last week.More fiscal stimulus is expected now that the Democrats have gained control of Senate, boosting the prospects for President-elect Joe Biden’s legislative agenda. There is also optimism that the roll out of coronavirus vaccines will be better coordinated under the Biden administration.