Employment Stalls

Spreading shutdowns following the spreading virus caused employment gains to take a pause. While normally 245,000 jobs in November would be something to cheer about, expectations were for 460,000 jobs making today’s data a disappointment. Next month we could have job losses as shutdowns and growing fatalities continue to take its toll on the country. The duress is compounded by the lack of action by Congress last month. At least the dimming outlook for employment should spur Congress to finally pass what, hopefully, will be the last major Covid related stimulus bill. The distribution of multiple vaccines will happen soon and it is only a matter of months before people around the globe will begin to feel safer about going out and being together again. Even if only 25% of the population is vaccinated, economic activity will see a significant improvement and continue to accelerate from there. Investors may see today’s data as “the glass is half empty” and fear the economy has stalled and even reversing its recent gains or that the glass is half full and the weakened labor market is just the fire needed to cement a compromise on a stimulus bill to get the economy over the hump until vaccines are approved and distributed. As for us, we recall Buffett’s advice to “Be brave when others are afraid.”