Focus Shifts to US Non-Farm Payrolls, Stimulus Deal and Pfizer’s Vaccine Snag

Preliminary reports indicate that job gains in November are expected to be weaker than in October, reflecting the impact of coronavirus-related shutdowns by states and local governments due to the record surge in COVID-19. The fear is this trend could continue until a successful vaccine is given to the masses. Meanwhile, there is added uncertainty about this report because of Wednesday’s bleak outlook for private sector jobs and Thursday’s more upbeat weekly initial claims data from the Labor Department.

Some Analysts Warning of Rise in Unemployment Rate

Economists expect a consensus of 440,000 nonfarm payrolls were added in November, and the unemployment rate fell to 6.7% from 6.9%, according to Dow Jones. The total number of payrolls is likely to again be impacted by a sizeable drop in government jobs, due to layoffs of census workers by the federal government and cost cutting at the state and local level.

One worry for economists is the uncertainty over when employers actually stopped hiring in November because of the staggered nature and strength of the newly imposed restrictions.

“What we don’t know is when restrictions started to bite,” said Michael Gapen, chief U.S. economist at Bank of America. “They started to go in around the middle of the month,” said Gapen of the latest round of restrictions. “We think risks to our forecast are to the downside.”

Gapen expects 550,000 payrolls were added in total, but Bank of America economists expect 150,000 payrolls were added in November, adding to the uncertainty of a jobs report that could also show a rise in the unemployment rate, not a fall, as the consensus has predicted.

Jefferies economists also expect the unemployment rate could rise in November. “Frankly, it is hard to envision a particularly strong report coming out on Friday,” they wrote. They forecast 340,000 payrolls were added in November.

US Policymakers Resume Talks as Congress Rushes to Strike a COVID Stimulus Deal

House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell spoke Thursday for the first time since at least the 2020 election as Congress scrambles to strike a coronavirus stimulus deal and prevent a government shutdown.

The congressional leaders discussed their “shared commitment to completing an omnibus [spending bill] and COVID relief as soon as possible,” Pelosi spokesman Drew Hammill said in a tweet. They have signaled they want to resolve both thorny issues by December 11, the last day of government funding.

“Yeah, well we had a good conversation,” McConnell told reporters of the discussion. “I think we’re both interested in getting an outcome, both on the omnibus and on a coronavirus package.”

Pfizer Supply Chain Challenges Let to Slashing COVID-19 Vaccine Production Target – WSJ

Challenges in Pfizer Inc’s supply chain for its COVID-19 vaccine played a role in its decision to slash its 2020 production target, the Wall Street Journal reported on Thursday.

Pfizer has said in recent weeks that it anticipates producing 50 million doses of its COVID-19 vaccine this year. That is down from an earlier target of 100 million doses. Pfizer’s vaccine relies on a two dose regimen, meaning 50 million doses is enough to inoculate 25 million people.

A company spokesman told the Journal “scaling up the raw material supply chain took longer than expected.” She also cited later-than-expected results from Pfizer’s clinical trial as a reason for the company’s reduced expectations for vaccine production this year, the Journal reported.

The Journal reported that an unnamed person directly involved in the development of the Pfizer vaccine said “some early batches of the raw materials failed to meet the standard,” which caused production delays.