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Weekly Market Recap: January 11, 2021

The week in review

  • Markit/ISM mfg. PMI at 57.1/ 60.7
  • Markit/ISM non-mfg. PMI at 54.8/ 57.2

The week ahead

  • CPI
  • Retail sales
  • Industrial production

Thought of the week

The 140,000 decline in nonfarm payrolls in December provided the clearest evidence yet that the resurgent COVID-19 pandemic has stalled the economic and jobs recovery. Job losses were concentrated in services, particularly leisure and hospitality, which shed 498,000 jobs, mostly in restaurants and bars that struggle to operate in the surging pandemic and colder weather.

Areas like manufacturing and construction had strong gains, reflecting less strain in goods than services. Indeed, 66% of jobs lost last spring have been regained in the goods sector, compared to 54% in services. Nearly 9 million jobs have not yet been recovered in services, over 10 times that of goods. While services jobs may continue to struggle this winter, broader vaccine distribution in the coming months should help economic activity not only normalize, but also experience a surge in pent-up demand for travel and dining in late 2021, improving employment markedly in the hardest hit leisure and hospitality sector.

Evidence that many of the job losses could be temporary is explicit in the employment report: in December, 15.8 million people reported that they had been unable to work because their employer closed or lost business due to the pandemic, 1 million higher than in November. Additionally, 4.6 million people not in the labor force were prevented from looking for work due to the pandemic. These figures should ease dramatically as the pandemic wanes later in 2021, assisted by fiscal stimulus to support businesses and employees in the meantime.

payroll employment lost and regained

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Past performance does not guarantee future results.

Diversification does not guarantee investment returns and does not eliminate the risk of loss.

Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.

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JPMorgan Distribution Services, Inc., member of FINRA.

J.P. Morgan Asset Management is the marketing name for the asset management businesses of JPMorgan Chase & Co. Those businesses include, but are not limited to, J.P. Morgan Investment Management Inc., Security Capital Research & Management Incorporated and J.P. Morgan Alternative Asset Management, Inc. and JPMorgan Asset Management (Canada) Inc.

©JPMorgan Chase & Co., January 2021

Unless otherwise stated, all data is as of January 11, 2021 or as of most recently available.

Disclosure: J.P. Morgan

Past performance does not guarantee future results.

Diversification does not guarantee investment returns and does not eliminate the risk of loss.

Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.

The price of equity securities may rise or fall because of changes in the broad market or changes in a company’s financial condition, sometimes rapidly or unpredictably. International investing involves a greater degree of risk and increased volatility. There is no guarantee that companies that can issue dividends will declare, continue to pay, or increase dividends. Investments in commodities may have greater volatility than investments in traditional securities, particularly if the instruments involve leverage.

JPMorgan Distribution Services, Inc., member of FINRA.

J.P. Morgan Asset Management is the marketing name for the asset management businesses of JPMorgan Chase & Co. Those businesses include, but are not limited to, J.P. Morgan Investment Management Inc., Security Capital Research & Management Incorporated and J.P. Morgan Alternative Asset Management, Inc. and JPMorgan Asset Management (Canada) Inc.

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