The numbers: The United States lost jobs in December for the first time in eight months as the coronavirus again affected the economy and forced companies to resort to more layoffs.
The government and the private sector lost 140,000 jobs last month, the Bureau of Labor Statistics said on Friday.
The drop in employment was the first since April last year, when the US lost 20.8 million jobs this month.
The economy still lacks about 10 million jobs that existed before the pandemic, with little prospect of being recovered soon.
Empty patio tables at a California drive-in table. Coronavirus again costs jobs in the economy.
AFP through Getty Images
If there was a glimmer of news about the goods in the report, the layoffs focused on restaurants and other businesses, which rely on a large crowd of customers. In fact, many other segments of the economy made strong employment gains last month.
Meanwhile, the official unemployment rate remained unchanged at 6.7%. However, economists estimate that real unemployment is a few points higher because the official unemployment rate does not include about 4 million people who left the workforce last year.
Read: Claims for the unemployed are still very high at the end of 2020
“People who quit their jobs are a big problem,” said Thomas Barkin, chairman of the Federal Reserve.
In early trading, US stocks rose slightly. Dow Jones Industrial Average DJIA,
set a new record on Thursday as investors overcome current economic difficulties at better times during the year as more people get vaccinated.
What happened: Employment fell by 372,000 in bars and restaurants, as customers evaded and many states reinstated trade restrictions in an effort to slow a record increase in coronavirus cases nationwide.
Many companies had to lay off workers for the second or third time, and some even had to close permanently.
Recreational jobs – theme parks, casinos and the like – also fell by 92,000, and the hotel industry eliminated 24,000 positions.
Added to job losses, employment fell by 63,000 in private education and 45,000 in government.
The news was not bad at all: employment rose in a number of other important segments of the economy.
Employment increased by 161,000 in white-collar professional ranks, for example, and by 121,000 in retail stores, although the increase in the number of retail jobs was probably exaggerated by seasonal fluctuations.
Construction companies also added 51,000 jobs amid rising home sales, while manufacturers added 38,000 workers to their wages. And employment has risen by 47,000 among shippers and transport companies that deliver more packages than ever before to homes and companies.
Employment was also stronger in November and October than previously reported. The number of new jobs created in November was increased from 245,000 to 336,000. Job earnings in October were revised up to 654,000 from 610,000.
Overview: The US economy was not nearly as badly hit by the coronavirus outbreak in late 2020 as it was during the initial attack last spring.
However, the momentum has clearly slowed. Growth and employment are unlikely to accelerate again until vaccinations are more widespread and the pandemic disappears. Unemployment is expected to remain high at least until the summer.
What are they saying? “This is a major obstacle to the labor market and the economy, but the narrow concentration of losses due to restrictions keeps a positive light on the possible post-vaccination recovery,” senior economist Sal Guatieri told BMO Capital Markets.
“This is a break in the recovery, not a complete stand,” said chief economist Chris Low of FHN Financial.
Market reaction: Dow Jones Industrial Average DJIA,
and S&P 500 SPX,
opened slightly higher in Friday’s transactions.
Investors are investing in a stronger economy in 2021, helped by more federal stimulus from a Democratic president and a Democratic-controlled Congress.