Employment in leisure and hospitality industries declined by 498,000, the majority of that at restaurants, bars and other food service establishments, which have struggled amid limitations from cold weather and a new round of restrictions across the country.
Employment in another tourism-related category â€” amusements, gambling and recreation â€” fell by 92,000. Government employment declined by 42,000. These declines offset modest gains in other sectors, such as professional and business services, retail and construction.
The data, released by the Bureau of Labor Statistics on Friday morning, points to the significant economic challenges facing President-elect Joe Biden as he inherits one of the weakest labor markets in years from President Trump, with the end of the pandemic still out of sight and political crisis consuming Washington yet again.
â€œItâ€™s a damaged labor market,â€ said Augustine Faucher, chief economist at the PNC Financial Services Group. â€œBut it is a labor market that is poised for recovery, given the fact that we are seeing the vaccine. With support from the federal government and support from the Federal Reserve, it could see a strong rebound over the next few years.â€
Trump will leave office with one of the worst performances on jobs of any president in decades; the economy shed 22 million jobs between February and April with the onset of the pandemic and has regained just over half. Low-wage jobs have been the hardest-hit.
The next few months is likely to continue to be tough for the labor market as winter and coronavirus-related shutdowns chill the ability of hospitality and restaurant industries to operate and the level of infections remains an obstacle to other attempts to get struggling sectors of the economy going.
But economists remain largely optimistic about the rest of the year, with hopes riding on the rollout of the coronavirus vaccine and a $900 billion stimulus passed by Congress in final weeks of 2020.
â€œIâ€™m very optimistic about the second half of the year,â€ said Julia Pollak, labor economist at the jobs site ZipRecruiter. â€œBusinesses have just not been able to get back to business as usual as quickly as they hoped, but thankfully the government has provided more assistance and stimulus than ever before.â€
Even at slow levels of growth, it could take years for the United States to return to the levels of employment it enjoyed before the pandemic.
Economists have been warning about the potential for the labor market to go south since the summer, but the economy had continued to add jobs, albeit at an increasingly slow pace, since April