U.S. sheds 140,000 jobs in December, halting labor market recovery
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The U.S. economy shed 140,000 jobs in December, while the unemployment rate held at 6.7%, the government said on Friday.
Why it matters: The job market recovery that had been underway for the past seven months ended last month, buckling from the pressure of the coronavirus pandemic.
Details: The leisure and hospitality sector shed nearly 500,000 jobs, reflecting the enormous stress the sector faces as coronavirus cases surge and states impose economic restrictions — leading to worker layoffs.
- Three quarters of these losses (372,000) were in restaurants and bars. Cold weather prevented them from taking advantage of the outdoor dining that helped keep business afloat in earlier months.
The bottom line: The labor market was digging out from the over 22 million jobs lost because of the coronavirus. The way worse-than-expected December numbers chips away at that progress, dashing any lingering hopes of a "V-shaped' job recovery.
- The job market is 9.8 million jobs short of where it was before the pandemic hit, with 55% of the jobs lost in March and April having come back.
What to watch: Economists are looking ahead to the latest coronavirus relief package (plus likely more relief during the incoming Biden administration) and a broader vaccine rollout — which could stem the labor market bleeding.
Yes, but: “We can't say, ‘don't worry, everything is fine, and it’s all growth from here,'” James Knightley, an economist at ING Financial, told Axios ahead of the jobs report.
- “I think that you could get the more pain in the jobs market in the next few months."
