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U.S. Economy Loses 140,000 Jobs to Close 2020

The United States economic recovery effort hit a significant speed bump to close 2020, as the Labor Department’s jobs report on Friday revealed that 140,000 jobs were lost last month.

After five consecutive months of slower job growth, December was the first month of actual job losses since April — the onset of the pandemic.

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The economy still has about 10 million fewer jobs than before the pandemic began. December’s losses were concentrated in leisure and hospitality businesses, which have been among the hardest hit industries by the pandemic. The industry cut nearly half a million jobs last month, while other industries continued to add workers.

Despite the losses, the unemployment rate remained unchanged at 6.7%, which is down significantly from the high of 19.2% in April, but still much higher than the 3.5% rate in December 2019.

“We’re losing ground again,” Diane Swonk, chief economist at the accounting firm Grant Thornton told The New York Times. “Most notably, this is still very much a low-wage recession, and the losses were where we first saw them when the pandemic hit.”

The job losses come at a time when coronavirus cases are still surging across the country, which has led to more shutdowns in some areas. Congress passed a $900 billion relief package last month that will provide temporary support to households and businesses and could give a boost to the broader economy. The arrival of coronavirus vaccines should also allow the return of activity that has been suppressed by the pandemic. But those positive developments have yet to come to fruition.

“The decline in payroll employment reflects the recent increase in coronavirus (COVID-19) cases and efforts to contain the pandemic,” the DOL said in its report Friday.

The jobs report showed that nearly four million Americans had been out of work for more than six months, which is economists’ standard threshold for long-term unemployment. That was up by 27,000 from November, and roughly quadruple the number before the pandemic began.

About the Author

Brett Christie Bio Image

Brett Christie is the managing editor of Workspan Daily.


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