The United States lost 140,000 jobs in December, according to data released by the Labor Department Friday—much worse than economists expected and marking the first monthly decrease in employment since the pandemic forced millions of job losses in April.
The unemployment rate remained flat at 6.7% in December, as compared to November; the metric hit a record high of 14.7% in April.
There are now 10.7 million unemployed people in the United States, compared to 10.9 million in November, the government said.
The number of permanent job losers ticked down by 348,000 in December to about 3.3 million—about three times prepandemic levels.
In addition to the unexpected job losses, the labor force participation rate remained flat at 61.5%—meaning there are still 7.3 million people in America who still want a job but are not actively seeking employment.
About 4.6 million people not in the labor force in December were unable to look for work because of the pandemic, the BLS reported, up from 3.9 million in November.
December’s report continued to show stark differences in unemployment by race, with minority groups such as Black Americans and Hispanics facing above-average unemployment rates of 9.9% and 9.3%, respectively.
“With large swaths of the U.S. economy shut down throughout December to combat the spread of Covid-19, it’s no surprise that the economy lost jobs in December,” James McDonald, the CEO of Los Angeles-based Hercules Investments said of Friday’s “disappointing” jobs report. “The slower-than-expected Covid-19 vaccine rollout is keeping economic lockdowns and social distancing measures in place, which is a worrisome combination for small businesses and the jobs market.”
What To Watch For
McDonald notes that the future economic outlook is bound “ever tighter to the increasingly vulnerable labor market,” adding that the relationship between temporary job losses and permanent layoffs should shed light on how the labor market will take shape once the pandemic finally subsides.
Only a little more than half of the 22 million Americans who lost their jobs in the early months of the pandemic are once again employed. The unemployment rate, however, is “still far too high, especially because the headline number masks the millions of Americans who have simply dropped out of the labor force,” Philadelphia Federal Reserve President Patrick Harker said Wednesday, noting that the swelling number of those experiencing long-term unemployment is also troubling. Also Wednesday, Goldman Sachs noted that the broad-based resurgence of the coronavirus and resulting business restrictions have led to a slower recovery in the job market than elsewhere in the economy, such as the booming stock market, for example. “Additionally, while continuing jobless claims declined during the payroll month, much of the drop reflected the expiration of program eligibility—as opposed to reemployment,” the Goldman analysts noted, referencing the one week of lapsed unemployment relief as a result of President Donald Trump’s delay in signing the $900 billion stimulus package over the holidays.
“Layoffs in leisure and hospitality and other virus-sensitive services categories temporarily halted the employment recovery that began in May and that we expect to continue in 2021,” Goldman added Wednesday. Fed President Harker, meanwhile, said about 30% of employment in those sectors has “evaporated” year over year—marking a “still-stunning decline” nearly one year into the pandemic.
19.2 million. That’s how many people were still receiving some form of government unemployment benefit last week—shockingly high compared to the 1.8 million in the comparable week in 2020, according to weekly data released Thursday. That’s higher than the number of unemployed Americans, due to a startling number of people who’ve dropped out of the labor force because they’re no longer looking for work.