Saturday, January 9, 2021

US loses jobs in December, leaving a hole of nearly 10 million as 2020 ends

The COVID Winter hit the US jobs market in December, ending a 7-month streak of job growth.
U.S. employers shed jobs last month for the first time since April, cutting 140,000 positions, clear evidence that the economy is faltering as the viral pandemic tightens its grip on consumers and businesses.

At the same time, the unemployment rate stayed at 6.7%, the first time it hasn’t fallen since April.

Friday’s figures from the Labor Department depict a sharply uneven job market, with losses concentrated among restaurants, bars, hotels and entertainment venues, many of them affecting low-income employees, while most other sectors are still adding workers. Still, the nation has nearly 10 million fewer jobs than it did before the pandemic sent it into a deep recession nearly a year ago, having recovered just 56% of the jobs lost in the spring.
Very bad , bunumbers overall, but note the "unevenness", which is even more apparent as you dig into the full jobs report.

On the good side, the loss of jobs in December was almost entirely offset by upward revisions in previous months.
The change in total nonfarm payroll employment for October was revised up by 44,000, from +610,000 to +654,000, and the change for November was revised up by 91,000, from +245,000 to +336,000. With these revisions, employment in October and November combined was 135,000 more than previously reported.
So while job growth was slowing in recent months, it was better than we thought, which is a good thing. However, we are still far below the amount of jobs that we had before the COVID World set in, at 9.8 million below February's job peak, and 8.5 million lost in the private sector.
Definitely a leveling off, and worth keeping an eye on for 2021. However, not all sectors leveled off in the last month of 2020. The goods side of the jobs market continued to climb back, with construction adding another 51,000 (seasonally-adjusted) jobs in December, and manufacturing adding 38,000.

Another remarkable part of the jobs report was a large increase in retail hiring for December. And much of that hiring was well above the typical amount of hiring for the biggest month of Holiday shopping season. Jobs change, seasonal vs non-seasonal Retail
Seasonally-adjusted +120,500
Non-seasonal total +229,700

Big Box Stores/Supercenters
Seasonally-adjusted +58,700
Non-seasonal total +54,900

Health and Personal Care stores
Seasonally-adjusted +9,800
Non-seasonal total +17,000

Food and Beverage Stores
Seasonally-adjusted +7,900
Non-seasonal total +15,900

Clothing and Clothing Accessories
Seasonally-adjusted +7,700
Non-seasonal total +45,500

The question is whether these added retail jobs stick around after the Holidays, and if it reflected a big jump in business that'll show up in the retail sales numbers that emerge next week.

But other services continued to lag, with some areas suffering significant losses to end the year as COVID got to its worsty levels yet. And no sector was hit harder than already-beleaguered bars and restaurants, which lost 372,000 jobs in December.

This sure tells me that one priority of the new Dem Congress and Biden Administration is to go beyond the limits of PPP 2.0, and pass the $120 billion RESTAURANTS Act, which targets aid specifically for that service industry.

Two other beaten up consumer spending areas lost jobs in December - the lodging industry, and the arts/entertainment/spectactor sports sector. This leaves both areas with 1/3 fewer jobs than they had before the COVID World came in.

The second straight month of a 6.7% unemployment rate and a third straight month of a 57.4% Employment-Population Ratio also indicates that any "recovery" from the depths of this spring had plateaued, with our economy in danger of falling back down. And with COVID infections and deaths reaching new highs in January, it doesn't seem likely that the next jobs report will be much better.

Which makes it all the more important that the new Biden Administration and Dem Congress get things quickly moving on two fronts.

1. Get people vaccinated against COVID and the virus under control, so people can be confident in going out to more types of places.

2. More stimulus, both in the form of larger checks to more people, and in targeted help to boost the beaten-up service sectors that cratered in 2020. Then for the Summer, do a major infrastructure package to keep construction and manufacturing going, and to ease the pressures in a public sector that has already lost 1.34 million jobs in the last 10 months.

And as an ending tag, there's this inequity in the jobs market that needs to be discussed as well.

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