Did US labour market begin rebounding after a grim December?

Did US employers resume hiring after the jobs recovery sputtered in December?

US jobs figures for January, out on Friday, are expected to show the nation’s economy has resumed hiring, but that it will take longer to recover from the Covid-induced losses than many had expected.

The number of long-term unemployed, or those who have been jobless for 27 weeks or more, jumped to almost 4m in December from 1.1m in February, before the pandemic. Overall, about 18.3m Americans are on unemployment aid and the US has 9.8m fewer jobs than it had in February.

Economists surveyed by Bloomberg estimate that this week’s non-farm payrolls will show that the US added just 55,000 jobs in January. It follows a loss of 140,000 in December — the first monthly decline since the early days of the pandemic in April — owing to increased restrictions to curb the spread of the virus.

“There will be no material improvement in the jobs market until containment measures are eased, and that won’t happen soon given the slow rate of vaccination,” said Padhraic Garvey, regional head of research Americas at ING.

The jobs figures, alongside a rapidly slowing economic rebound, outline the monumental task for Joe Biden, the new US president, whose success will be measured by his handling of the pandemic and the economy.

Mr Biden has stressed the importance of pushing through his $1.9tn stimulus plan, which remains in a Congressional deadlock but has shown signs of progress in recent days after the president signalled he was willing to make concessions. Mamta Badkar

Will the Bank of England signal further easing is on the horizon?

The Bank of England’s Monetary Policy Committee faces a balancing act with Thursday’s interest rate decision.

On the one hand, an economically damaging lockdown has been extended for longer than the central bank had anticipated and there remains the risk of a double-dip recession. However, the prospect of an economic rebound has been brightened by the UK’s rapid rollout of the vaccine, bolstering chances that restrictions can start to be lifted in the spring.

With the base interest rate at a record low of 0.1 per cent, the BoE has minimal room for manoeuvre before it enters the contentious territory of negative interest rates.

Debate continues inside and outside the central bank as to whether it should follow its European counterpart down such a path. MPC external member Silvana Tenreyro said in a speech on January 11 that negative rates “should with high likelihood boost UK growth and inflation”. However, governor Andrew Bailey said the following day that there were “a lot of issues” with the policy.

For now, at least, the market expects the BoE to hold its fire.

“If they were to vote to cut rates . . . it would be a huge surprise,” said Anthony Carter, fixed-income manager at Sarasin & Partners. The market is pricing almost no chance of a cut this week, but expects marginally negative rates early next year, he said.

Oxford Economics’ Martin Beck concurs. “We think the MPC will look through the economic pain of the current lockdown to the promise offered by the rollout of vaccines.” Laurence Fletcher

Will BlackRock’s call for emissions cuts have any effect?

BlackRock told companies last week that they needed to commit to cutting their carbon emissions to net-zero by 2050 or risk being dropped from its active funds. The call to action by the world’s largest asset manager came directly from its boss, Larry Fink, in his annual letters to clients and chief executives. 

Mr Fink, who has faced criticism for what some saw as his company’s lack of action on climate change, has focused more closely on the topic over the past two years. 

Last year, he made waves after announcing that BlackRock would put climate risk at the centre of its investment decisions. This year he doubled down, saying that the market was seeing a “tectonic shift” towards sustainable investing that was moving faster than he had expected. 

In addition to threatening to expel companies from its discretionary funds, Mr Fink also said BlackRock would vote against management of companies in its index funds that did not articulate a credible plan to emit no more carbon than they pulled out of the atmosphere.

As BlackRock controls nearly $8.7tn, companies will surely take notice. But it is not the first asset manager to make such a request. Last year, a group of 30 of the world’s biggest asset managers that collectively oversee $9tn called on companies to slash emissions to net zero, also by 2050.

And while Mr Fink’s letters were full of lofty rhetoric, they were light on detail. He did not explain what a satisfactory net-zero plan should look like, nor did he specify what would cause BlackRock to take action against a company. Billy Nauman