U.S. Economy Lost 140,000 Jobs in December 2020
There’s no question that 2020 will go down as one of the most challenging years in recent memory for many Americans. Yet, after major job losses in the spring of last year, employment began to rebound as businesses were allowed to reopen. Unfortunately, following months of slowing growth, job figures ended the year on a down note.
According to the latest report from the U.S. Bureau of Labor Statistics, the economy shed 140,000 jobs in the last month of 2020. This marks the first decline in jobs in eight months, with the economy previously steadily reclaiming jobs after April’s 20.8 million job loss. As a result, the U.S. is still down a total of 9.8 million from February. Despite the drop in jobs, the unemployment rate remained at 6.7% in December — an improvement from the 8.1% in April but still a far cry from the 3.5% in February 2020.
Taking a closer look at the figures, the underline number was mostly driven by a loss of 498,000 jobs in the leisure and hospitality sector. This includes 372,000 job losses at bars and restaurants — many of which may have been forced to close or layoff workers due to increased lockdown measures in parts of the country amid surging COVID-19 case numbers.
U.S. Secretary of Labor Eugene Scalia mentions, “Meanwhile, employment grew in December in six of the nine major industrial sectors that had significant changes, including manufacturing and retail.” Scalia went on to note that the majority of job losses “appear concentrated in temporary rather than permanent layoffs.” To that point, Glassdoor’s Senior Economist Daniel Zhao said of the report, “I think there is a case for cautious optimism. If losses are mostly contained to temporary layoffs, then targeted aid might be able to bridge the gap until there’s mass vaccination.”
Obviously this report comes at the end of what’s proven to be a turbulent week in the United States of America. However, there is reason to believe that we could finally be turning a corner in the coming weeks. While it remains unclear when the vaccines that are currently being distributed will be available to all, more stimulus actions could be on the way as it appears that the Democrats will soon control both chambers of Congress along with the White House — meaning that legislation drafted is more likely to be signed into law without facing the same roadblocks that have halted previous efforts. With that, we’ll have to wait and see if the U.S. economy can make a comeback in 2021.