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.