Unemployment Peaks in December
In a devastating blow to the economy, data released by the Bureau of Labor Statistics revealed that there was a net loss of 140,000 US jobs last December, a much steeper decline than most economists had anticipated.
The main reason for the losses was a sharp uptick in coronavirus cases. December was the most infectious month of the pandemic, with over 77,000 deaths and 6.4 million cases, compared to 4 million cases in the preceding month. As a result of the increase in infections, governments have taken steps to limit the spread of the virus. Additionally, most brick-and-mortar stores have seen much less activity. These two factors have both played a role in the major lay-offs that plagued many industries and the economy as a whole. “It’s a really vivid demonstration that the economy can’t bounce back in any sustainable form until the pandemic is under control,” Nick Bunker, an economist at the Indeed Hiring Lab who focuses on the US labor market, said.
The leisure and hospitality industry faced the most crippling losses. The industry shed over 450,000 jobs, mostly in eateries. In total, the industry has dropped nearly 4 million jobs since mid-March when the pandemic began.
Still, most economists agree that the economy is on the track to recovery. Of the 22 million jobs lost during the pandemic, more than half have been regained, and the several recently approved vaccines are expected to have a beneficial effect as well once mass vaccination begins. “I think there is a case for cautious optimism,” Harvard economist Daniel Zhao said. Furthermore, even as some industries faced extensive losses, others continued to gain jobs -- retail trade alone added 121,000 jobs.
Incredibly, women accounted for nearly all of the job losses; as a group, they lost a net total of 156,000 jobs, while men gained 16,000 in December. Within this group, the divisions were almost as stark by race. Blacks and Latinas faced enormous job losses, while white women as a whole gained jobs in the month.
One of President Joe Biden’s major tasks will be how he deals with an economy in shambles. “The bottom line is the jobs report shows we need to provide more immediate relief for working families and businesses now,” Biden said. The newly-elected president used the data to push for increased economic relief, including the $2,000 stimulus checks he has championed and promised to pass shortly after taking office.