Job Market Trends

The nation’s economy lost jobs last month for the first time since April, when the coronavirus (COVID-19) pandemic threw the economy into lockdown.

The Labor Department reports that nonfarm payrolls shrank by 140,000 in December. To find the main source of the damage, one needs to look no farther than the hospitality industry. These COVID-19-sensitive businesses -- particularly restaurants -- lost nearly a half-million jobs.

December marked the end to what had appeared to be a recovering job market. The economy began adding jobs in May and had restored more than 12 million jobs until last month.

Despite the setback, two numbers remained unchanged last month. The number of people who were out of work remained at 10.7 million, and the unemployment rate was unchanged at 6.7 percent.

In addition to the huge loss of jobs in the hospitality industry, private education shed 63,000 jobs and 45,000 government jobs disappeared.

Some industries added jobs

On the plus side, retailers added 121,000 jobs in December, even as more holiday sales moved to online channels. More than half the gain came at general merchandise stores and warehouses.

Employment in business and professional services grew by 161,000 last month, but a large number of those jobs were temporary in nature. Construction added 51,000 jobs in December, but employment in the industry is 226,000 below its February 2020 level, just before the pandemic.

Economists say the employment report shows there was a need for the coronavirus stimulus/aid bill Congress passed last month. It includes an extra $300 a week in unemployment benefits and a one-time $600 direct payment to every American.

President-elect Biden has served notice that more aid/stimulus will be coming in the weeks ahead now that Democrats control the White House and both chambers of Congress.

As the COVID-19 pandemic continues to hold the economy hostage, the number of first-time unemployment insurance filers in the U.S. rose another 3.84 million in the last week, moving the total number of claims across the 30 million mark. 

However, there’s a small silver lining in that report -- the latest total is a decrease of 603,000 from the previous week's revised level. 

All 50 states are delivering unemployment checks

There’s another sliver of good in the state-by-state unemployment filings, too. For the week ending April 25, only seven U.S. states showed increases in the number of filings. 

This is a welcome relief for the states. When the pandemic hit, unemployment insurance funding and staffing at the state level was at an all-time low, forcing the states to play catch-up. A new study from the Economic Policy Institute suggests that for every 10 people who were able to file an unemployment claim, there were another three or four who weren’t successful, as well as two more who didn’t apply because they thought it was too difficult.

For those who were able to get through the filing process, U.S. Secretary of Labor Eugene Scalia says they are now getting what they were promised. 

“All 50 states are now delivering the $600 additional weekly unemployment benefit provided by the CARES Act,” Scalia in a statement regarding Unemployment Insurance claims. “The Department has disbursed more than three-quarters of a billion dollars to States to help them deliver this relief as quickly as possible as Americans follow the guidance of public health officials to ‘slow the spread.’”

The impact continues to hit home

Gallup went a little further down the rabbit hole to try and find just how close to home pandemic-related unemployment has hit. In a recent study, its researchers found that:

• Nearly one in every three Americans have experienced either a temporary layoff, permanent job loss, reduction in hours, or reduction in pay as an extent of the coronavirus situation; 

• Eighteen percent have experienced more than one of these disruptions; and

• The hardest-hit population sector are those in the lower income brackets. Among pre-epidemic annual household incomes of less than $36,000 annually, 14 percent report being temporarily laid off, 4 percent have been permanently let go, and 32 percent have seen a loss of income.

The long look ahead

Projections for when America will be back at full speed with workers at desks, travelers on planes, and people hugging and high-five’ing again is anyone’s guess. 

However, as to the workers-at-desks question, the prospect doesn’t bode well. In a separate survey, Gallup found that a record-high 25 percent of employed U.S. adults think it’s possible that they’ll be laid off in the next year -- just a year after a 45-year low of 8 percent was registered for the same question. 

Scalia’s viewpoint isn’t quite as blunt, but he says there’s one key element that is likely to make a significant impact.

“Looking ahead, as workplaces reopen, we must ensure that individuals transition from unemployment back into the workforce,” Scalia said. “Key to this process will be workplace safety. The Occupational Safety and Health Administration has been at the forefront of workplace safety since January, delivering important resources and guidance to businesses to help them keep workers safe, and investigating and responding to worker complaints.”