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U.S. economy lost 140K jobs in first decline since April amid renewed COVID-19 lockdowns
How do you feel about recent trends in the job market?
By Eric Revell, Countable News
What’s the story?
- The Bureau of Labor Statistics (BLS) on Friday released its jobs report for December 2020, which found the U.S. economy lost 140,000 jobs and the unemployment rate was unchanged at 6.7%. The report falls short of the Dow Jones forecast that 50,000 jobs were added, while the forecasted unemployment rate was 6.8%.
- The BLS wrote that the December jobs report “reflects the recent increase in coronavirus (COVID-19) cases and efforts to contain the pandemic.” The economy lost 22.2 million jobs in March and April 2020 due to lockdown measures initiated to slow the spread of COVID-19, then added 12.3 million over the ensuing seven months. That leaves the economy about 9.8 million jobs below its February 2020 level as seen in the USAFacts chart below:
- This USAFacts chart shows the monthly unemployment rate, which remained flat at 6.7% from November to December:
Jobs Report Sector Breakdown
- The leisure and hospitality sector was hit hardest as 498,000 jobs were shed in December when restaurants, bars, and recreation centers faced renewed restrictions on their operations. Job losses also occurred in government, education and health services.
- The bright spots in the labor market were professional and business services, which gained 161,000 jobs, and retail trade which added 120,500 jobs.
- This USAFacts chart shows the change in employment from November to December 2020 by industry:
Demographic Unemployment Information
- Unemployment rates were essentially unchanged for adult men (to 6.4% from 6.7% in November) and adult women (6.3% from 6.1% in November), but increased for teenagers (16% from 14% in November).
- Unemployment rates increased among Hispanics (to 9.3% from 8.4% in November), and were essentially unchanged among whites(6% from 5.9% in November), blacks (to 9.9% from 10.3% in November), and Asians (to 5.9% from 6.7% in November).
Revisions & Data Notes
- Employment in October was revised up by 44,000 from +610,000 to +654,000.
- Employment in November was revised up by 91,000 from +245,000 to +336,000.
- As it has since March, the BLS published an estimate of what the unemployment rate would have been had misclassified workers been included. The misclassification hinges on a question about the main reason people were absent from their jobs, with people absent due to temporary, pandemic-related closures recorded as absent due to “other reasons” as opposed to unemployed due to temporary layoff.
- Using this approach, the December unemployment rate would have been 0.6 percentage points higher than reported. The BLS notes that this represents the upper bound of their estimate of misclassification and probably overstates the size of the misclassification error.
- According to usual practice at the BLS, data is accepted as recorded in the household survey. To maintain data integrity, no ad hoc actions are taken to reclassify survey responses.
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