- The US lost 140,000 nonfarm payroll jobs in December, according to the Bureau of Labour Statistics.
- The loss comes as a surprise, as some economists anticipated more jobs would be added.
- Leisure and hospitality workers were particularly hard hit, as were workers who couldn’t work from home.
- Visit Business Insider’s homepage for more stories.
The United States lost 140,000 jobs in December.
The Bureau of Labour Statistics reported the surprising dip in nonfarm payroll jobs on Friday. As Insider’s Ben Winck reported, economists had actually anticipated that 50,000 jobs would be added.
It’s the first decline in a jobs report since April, showing how the recovery has slowed down. On the other hand, unemployment remained steady at 6.7% coming in lower than the 6.8% economists had forecasted, Winck also reported.
Significantly, the payroll report shows that America is still seeing a K-shaped recovery, with low-wage jobs and jobs with low work-from-home capacity all seeing the biggest losses.
These three charts highlight the slow recovery for lower-wage industries
Jed Kolko, the chief economist at Indeed, shared on Twitter a chart showing just how much the pandemic continues to affect different types of jobs, based on how likely it is that those jobs can be worked from home. The following chart from Indeed shared with Insider shows these varying job losses:
Employment for jobs that can’t be done from home, such as in restaurants and grocery stores, is 8.4% below its February level. However, jobs that can be done from home haven’t been as largely affected. The extent to which a job can be done from home is based on research from Jonathan Dingel and Brent Neiman.
Nick Bunker, an economist at Indeed, shared on Twitter a graphic highlighting job changes last month and since February based on typical industry wages. The following chart from Indeed shared with Insider shows the per cent change in jobs over the last month:
Lower-wage jobs were the only type that saw a loss instead of a gain last month, showing this group of jobs is still struggling to recover. Lower-wage jobs saw about a 0.9% loss in jobs last month, and Bunker notes on Twitter that overall these jobs “remain the hardest hit since the pandemic started.”
Similarly, Insider has been tracking what the recovery since the start of the pandemic has looked like in various subsectors.
(Using data from the Bureau of Labour Statistics, the chart above highlights the per cent change in employment from February to December across different industries along its vertical axis. We also included median hourly wage data from the BLS as of May 2019 along the horizontal axis.)
Higher-wage industries are around, or even above, their February level of employment, while many lower-paying industries are still below pre-pandemic levels. For instance, “securities, commodity contracts, and other financial investments and related activities” industry, with a high median hourly wage of $US39.85, is just 0.8% below its February employment.
Couriers and messengers are among the few lower-wage industries that have experienced job gains amid the pandemic, adding 37,400 jobs last month. This is because more workers are needed to deliver goods as people continue to shop from home, similar to last month’s report. Employment in couriers and messengers is now 26.2% higher than in February.
Last month, two industries in the leisure and hospitality sector saw their first drops in employment since the spring, and are still below their level of employment in February. After a smaller number of gains in November compared to October, accommodation saw a drop in employment in December at 23,600 jobs lost. Its level of employment is now 31.8% below last February’s level. Additionally, the food services and drinking places industry is 19.9% below February’s level.
Restaurants and leisure were hit especially hard
Leisure and hospitality workers were particularly hard hit,losing 498,000 jobs. Restaurant workers bore the brunt of that, shedding 372,000 jobs â€” three-quarters of those losses, according to the Bureau of Labour Statistics.
“The people who work in restaurants and bars are uniquely hurt by this pandemic, and don’t deserve it. Over 110,000 restaurants and bars â€” over one in six across the country â€” have been left with no choice but to permanently close since March, destroying an important ladder of economic opportunity for millions of people,” The Independent Restaurant Coalition (IRC) said in a press release. “Restaurants, bakeries, bars, and coffee shops employ more non-white managers and young people than any other industry. Immigrants, a million single mothers, and the formerly incarcerated rely on restaurants and bars for their livelihood.”
“This is the clearest sign yet that tighter social distancing restrictions are weighing on the economy, with half a million jobs lost in the leisure and hospitality sector in December,” Brian Coulton, Fitch chief economist, said. “The more reassuring aspect of the report is that employment declines were very concentrated, with most industries outside leisure and hospitality seeing gains.” He added that GDP still appears to have been expanding in the fourth quarter.
And those jobs â€” which have historically been centered on in-person dining and travel â€” face an ever-worsening pandemic.