The jobless rates for Hispanic workers, teenagers and women rose in December.
The leisure and hospitality industry — which was hit hardest by the pandemic because of the face-to-face nature of the business — lost nearly half a million jobs in December, most of them in restaurants and bars. The industry has shed 3.9 million jobs, or 23.2{c25493dcd731343503a084f08c3848bd69f9f2f05db01633325a3fd40d9cc7a1}, since before the pandemic.
However, the concentrated nature of the job losses means that the recovery in other areas of the economy is still going, said Sal Guatieri, senior economist at BMO, in a note to clients. Retail trade, for example, added 121,000 jobs in December.
“I think there is a case for cautious optimism,” said Glassdoor’s Senior Economist Daniel Zhao. “If losses are mostly contained to temporary layoffs, then targeted aid might be able to bridge the gap until there’s mass vaccination.”
Washington has more work to do
All of this means Biden has his work cut out for him when he enters office later this month.
The US economy is far from its pre-pandemic strength and is still down 9.8 million jobs since February.
It took the labor market more than five years to recover from the job losses of the 2008 financial crisis, which were less severe.
But the new administration will also have to tackle the here and now: The jobs recovery, which was buoyant in the summer, has slowed down for months.
The employment-population ratio stood at 57.4{c25493dcd731343503a084f08c3848bd69f9f2f05db01633325a3fd40d9cc7a1} in December — flat from the previous two months, meaning that real improvements, proportionate to the population, have been missing for the entire fourth quarter.
Workers who have lost their jobs through no fault of their own still need the government’s help to make ends meet. The BLS reported that 15.8 million people were unable to work in December because their employer closed or was negatively affected by the pandemic, an increase of 1 million from November.
Economists expect job growth to be tepid at best at the start of this year and until the virus is brought under control through vaccinations or social restrictions. There could be more job losses in the coming months, Zhao said, but even if not, the recovery could remain on pause for a while longer.
But ultimately, the vaccine offers a light at the end of the tunnel.
“While these bleak numbers represent a weak handoff to 2021, the labor market recovery is expected to strengthen over the spring and summer as vaccinations lead to a gradually improving health situation,” said Gregory Daco, chief US economist at Oxford Economics.
