The US Bureau of Labor Statistics published last Friday its Employment Situation Report for December 2020. The headline figures point to a deterioration of the US labor market in December 2020, with a -140K net change in Total Nonfarm payrolls turning negative for the first time since April 2020. Both the Public sector and the Private sector shed jobs, with net losses of -45K and -95K respectively. Total Nonfarm payrolls remain a whopping 8.9 millions lower compared to their pre-pandemic level.
The negative change is related to a new surge of COVID19 infections in December which led many US States and Municipalities to impose lockdowns, curfews and forced closures of businesses and public service activities. Indeed, it could be seen that private jobs losses are concentrated in the retail and hospitality sector (-498K).
The Unemployment Rate (U3) remained stable in December at 6.7% from November but it is still higher by 3.2 percentage points over its pre-pandemic February 2020 level. In plain terms, there are 5 million more unemployed persons than in February 2020. Additionally, there are 5.5 million more people that are not in the labor force compared to this indicator’s pre-pandemic level. Among them, there are 2.3 million more people who are not in the labor force but who want a job now. The Augmented Unemployment Rate including part-time workers for economic reasons (U6) edged lower at 11.7% compared to 12% in November but it remains almost 5 percentage points above its pre-pandemic level.
Overall, the recovery of the job market stalled since October 2020 alongside a surge in COVID-19 infections. The outlook for Q1 2021 will depend on the progress achieved by the vaccination campaigns at the state and local level. Beyond the pandemic, the impact of the stimulus bill that was passed by the Congress signed by President Trump on New Year’s eve, alongside additional fiscal stimulus measures that could be engaged by the President-elect with the help of a thinly Democrat-controlled Congress are likely to support growth and jobs creation.
Household Survey: select indicators
Establishment Survey: select indicators
