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Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

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Data: Investing.com; Chart: Axios Visuals

The ADP private payrolls report showed U.S. employers cut 123,000 non-government jobs in December, the first net job loss since April.

Why it matters: There are still 10 million more unemployed Americans than there were in February and the report suggests a weak job climate could persist, despite recent relief efforts from Congress.

The big picture: Job gains have been slowing since May when the U.S. unexpectedly added 2.5 million jobs, and if Friday's numbers from the Labor Department follow the ADP report's direction the trajectory will have reversed the labor market's recovery in just eight months.

  • Economists had expected employers to add 340,000 private sector jobs last month.

The intrigue: The largest firms in the country (those with more than 1,000 employees) shed 169,000 positions.

Be smart: Big companies are flush with cash right now thanks to the Fed's massive market interventions in March that reopened credit markets and sent the cost of new debt back toward record lows.

  • The fact that large firms are cutting jobs, rather than hiring, points to the arrival of the new employment paradigm I wrote about in September wherein businesses are doing everything they can to ramp up productivity while also reducing costs, largely in the form of jobs and labor expenses.
  • Big corporations are now fighting for a “bigger piece of a smaller pie” thanks to the coronavirus pandemic's negative impact on household budgets, and are unable to raise prices meaningfully but also need to push forward with technology upgrades and investment to compete.

What to watch: The Fed noted in the minutes of its most recent meeting that "participants saw increased challenges for the economy in the coming months," due to surging COVID-19 cases and reduced spending, especially on services requiring in-person contact.

The last word: “America’s great jobs machine ran into a wall of rising coronavirus cases and state lockdowns which puts the entire economic recovery from recession at risk,” Chris Rupkey, chief economist at MUFG, told Reuters.

  • “The heart of every recession is job losses and right now the decline in jobs at year end is hinting that the dark days of the labor market last spring have returned.”

Go deeper

Updated Jan 28, 2021 - Economy & Business

2020 was the economy's worst year since 1946

Source: FRED; Billions of chained 2012 dollars; Chart: Axios Visuals

One of the last major economic report cards of the Trump era lends perspective to the historic damage caused by the pandemic, which continued to weigh on growth in the final quarter of 2020.

By the numbers: The U.S. economy grew at a 4% annualized pace in the fourth quarter, a sharp slowdown in growth compared to the prior quarter. For the full year, the economy shrank by 3.5% — the first annual contraction since the financial crisis and the worst decline since 1946.

By the numbers: Where the earmarks are wanted

Expand chart
Data: House Committee on Appropriations; Chart: Danielle Alberti/Axios

The Dallas-Fort Worth area is being targeted for the largest collective earmark request in the country, according to a detailed breakdown of overall requests released by the House Appropriations Committee.

Why it matters: House appropriators are trying to balance bipartisan momentum for infrastructure investment with "pork-barrel" spending's checkered political history. The data dump is an effort to provide transparency for what are now termed "community project funding" requests.

Democrats open to user fees for infrastructure deal

President Biden sits Thursday with Sen. Shelley Moore Capito (R-W.Va.) as they discuss his $2.3 trillion infrastructure proposal. Photo: T.J. Kirkpatrick/The New York Times/Bloomberg via Getty Images

Some Senate Democrats are open to paying for a compromise infrastructure package by imposing user fees, including increasing the gas tax and raising money from electric car drivers through a vehicle-miles-traveled charge.

Why it matters: By inching toward the Republican position on pay-fors, some Democrats are bucking President Biden's push to offset his proposed $2.3 trillion plan by focusing only on raising taxes on corporations and the wealthy.

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