The slowdown seen in job growth in November took a big turn for the worse in December. The Bureau of Labor Statistics reported Friday that in the 10th month since the economy was forced into recession by responses to the spread of the coronavirus, a seasonally adjusted 140,000 jobs were shed. The private sector lost 95,000 jobs, while government jobs fell by 45,000.
This is the worst showing since March and April when 22 million lost their jobs as the pandemic shutdown occurred, but the biggest job loss before then came in February 2010. Only 12 million have since gone back to work, many only part-time. In most job categories there was growth. But half a million jobs were shed in the leisure and hospitality sector, overwhelming the gains elsewhere. The Pandemic Recession is proving far worse than the Great Recession, though considerably different in character.
The headline unemployment rate remained at 6.7%, while an alternative measure that gauges unemployment and underemployment fell 0.3 to 11.7%.
The promise of better economic days ahead because of vaccinations offers hope for a return in six to nine months or so to something approaching the “normality” of the Before Times. There is, however, an immense reservoir of economic pain from the Pandemic Recession that, like the coronavirus itself, will have residual effects lasting a very long time. Also like the coronavirus, the economic fallout is affecting people of color, women, and the young more harshly than it is white people and older cohorts.
Elise Gould at the liberal-leaning Economic Policy Institute, writes:
The latest Congressional relief bill is an important step toward addressing some of this pain, but it is not at the scale of the problem. I’m hopeful that more relief measures are on the horizon for increasingly desperate workers and their families. Senate Republicans forced the December bill to be far too small. Fortunately, with the Democratic majority in the Senate given the results of the Georgia runoffs, Democrats will now be able to get more relief measures through reconciliation. Top priorities must be aid to state and local governments and further extensions of unemployment insurance.
Said Kathy Bostjancic, chief U.S. financial economist at Oxford Economics, “We’re seeing overall economic momentum is slowing, and that feeds through to the labor market. Employers are very cautious about rehiring at the same time they have had to increase layoffs, but the resurgence of the virus is really the main culprit here.”
A labor economist at the online job site ZipRecruiter, Julia Pollak, said, “Employers are being apprehensive, and job seekers are not yet flocking back to the market in droves, either. “The virus is still spreading, hospitalizations have hit a new record, and there is a pullback in demand for certain services. A lot of stay-at-home orders and restrictions are causing a further decline.”
In another troubling calculation in the report, 27,000 more people joined Americans who have been out of work for 27 weeks or longer, a total of 3.96 million, 2.78 million more than in December 2019. Being out of work even for a couple of months can be rough on the wallet, but the longer someone is without a job, the harder it becomes to get another. If the pause in employment goes on long enough, skills get rusty, and as the financial squeeze tightens, people find themselves forced to take work for less pay and lower benefits. This problem can stick with them for years.
The report states:
In December, 23.7 percent of employed persons teleworked because of the coronavirus pandemic, up from 21.8 percent in November. These data refer to employed persons who teleworked or worked at home for pay at some point in the last 4 weeks specifically because of the pandemic.
In December, 15.8 million persons reported that they had been unable to work because their employer closed or lost business due to the pandemic–that is, they did not work at all or worked fewer hours at some point in the last 4 weeks due to the pandemic. This measure is 1.0 million higher than in November. Among those who reported in December that they were unable to work because of pandemic-related closures or lost business, 12.8 percent received at least some pay from their employer for the hours not worked, little changed from November.
Among those not in the labor force in December, 4.6 million persons were prevented from looking for work due to the pandemic. This measure is up from 3.9 million in November. (To be counted as unemployed, by definition, individuals must be either actively looking for work or on temporary layoff.)
The Wall Street Journal reports optimistically that December may be a one-off and the next few months will be much improved:
The silver lining is that economists believe the lull will be temporary. The process of distributing vaccines is under way. The roughly $900 billion aid plan is providing stimulus checks of up to $600 for most families, a $300-per-week boost in unemployment benefits for laid-off workers and a new round of aid for businesses. President-elect Joe Biden, a Democrat who takes office Jan. 20, has said he wants to provide more relief for households, and his party will control both chambers of Congress after the Senate elections in Georgia.
As households receive that money, many could boost spending, which would prompt businesses to hire workers to meet the demand.
BLS job reports depend on two surveys for their data. Staff who put together the Current Population Report conduct phone interviews with 60,000 households to determine the unemployment rate and the Current Employment Statistics questionnaire sent to 145,000 businesses provides information needed to calculate the number of jobs gained or lost. Formulas are applied to smooth out seasonal ups and downs.
Keep in mind that these data provide a snapshot of the job situation that is at least three weeks old since the CPS and CES surveys are conducted in the week that includes the 12th of each month. Thus any improvements or worsening of the job market that occurred in the last part of last month aren’t reflected in today’s report.
Here are more data from the December jobs report:
As it does every month, the bureau revised the job count for the previous two months, in November from 245,000 to 336,000, and in October from 610,000 to 654,000.
The civilian workforce rose 31,000 in December after falling 385,000 in November, now 4 million less than it was in February.
The labor force participation rate remained unchanged at 61.5% in December, as did the employment-population ratio at 57.4%.
Unemployment rates differ by race and sex. (December percentages in bold; November percentages in [brackets and italics].) Adult men: 6.4% [6.7%]; Adult women 6.3% [6.1%]; Whites: 6.0% [5.9%]; Blacks: 9.9% [10.0%]; Asians: 5.9% [6.7%]; Hispanics: 9.3% [8.4%]; American Indians: Not counted monthly.
Hours & Wages:
- Average hourly earnings of private-sector production and nonsupervisory employees rose in December by 20 cents an hour to $25.09.
- Average hourly earnings for all employees on private nonfarm payrolls in December rose 23 cents an hour to $29.81.
- Average work week for all employees on nonfarm payrolls fell 0.1 to 34.7 hours in December.
- The manufacturing work week in December remained unchanged at 40.2 hours.
December job gains and losses for selected categories:
Education and health services: -31,000
° Health care & social assistance: 32,000
- Manufacturing: 38,000
- Temporary help services: 67,600
- Professional and business services: 161,000
- Transportation & warehousing: 46,600
- Financial activities: 12,000
- Leisure & hospitality: -498,000
- Information: -1,000
- Retail trade: 120,500
- Construction: 51,000
- Mining and Logging: 4,000
- Government at all levels:
From Daily Kos at Read More. This article is republished from DailyKos under an open content license. Read the original article at DailyKos.