(CN) — A stalled economic recovery took a backslide in December, as 140,000 more jobs were lost while coronavirus cases surged during the holiday season.
A Labor Department report released Friday shows the first monthly losses since April, though the labor market is still down nearly 10 million jobs since 22 million were lost last spring. The unemployment rate held steady at 6.7% last month.
Most of December’s losses came in the leisure and hospitality industry, which includes restaurants and bars. Those establishments cut 372,000 positions as the latest uptick in Covid-19 cases kept consumers at home and forced some businesses to shut down again. Hotels cut 24,000 jobs while employment in the amusement, gambling and recreation sector fell by 92,000.
“The economic fallout from this wave of cases is hitting the industries and workers pummeled hardest by the initial damage before they fully bounced back from that first hit,” said Nick Bunker, economic research director at Indeed Hiring Lab.
Bunker said leisure and hospitality workers are at the mercy of the virus until the pandemic is under control and the jobs market as a whole “remains in a precarious position.”
“These numbers are distressing, but they are reflective of the time when coronavirus vaccines were not rolled out and federal fiscal policy was still deadlocked,” he wrote. “Hopefully the recent legislation can help build a bridge to a time when vaccines are fully rolled out and the labor market can sustainably heal.”
Friday’s jobs report is the last of President Donald Trump’s tenure. His successor Joe Biden will inherit the worst economic downturn since the last time he took office in 2009 as Barack Obama’s vice president.
“President-elect Biden will inherit an economy that has been decimated by Trump, who not only presided over outright job losses during his tenure, but also enacted a litany of anti-worker policy decisions and squandered the labor market strength he inherited,” wrote Elise Gould, a senior economist at the Economic Policy Institute.
Gould called on the new Congress to pass more aid for state and local governments in addition to extending unemployment benefits.
She called the job losses in December “an unequivocal disaster for the state of the economic recovery.” She noted the year ended with 9.8 million fewer jobs than before the pandemic began in February, and the economy is down 546,000 jobs since Trump took office in January 2017.
The massive job losses in leisure and hospitality last month were partially offset by gains in professional and business services (161,000), retail trade (121,000), construction (51,000) and transportation and warehousing (47,000). Health care, manufacturing and wholesale trade also added positions.
The private education sector lost 63,000 jobs in December and government payrolls shrank by 45,000, including 20,000 in state education and 32,000 in other areas of local government.
While the unemployment rate stayed flat, Joel Naroff of Naroff Economics warned it could stay above 6% for a long time.
“Underlying economic growth is slowing and there is little reason to expect that once the economy moves back toward trend growth during the first half of the year, future strong job gains can be sustained,” he wrote. “The flatlined but excessively high unemployment claims numbers point to continued pressure on the unemployment rate and the growing number of long-term unemployment is worrisome.”
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