January Employment Outlook
New year, same problems. And most of those problems are related to COVID-19. Even the Bureau of Labor Statistics specifically calls out the recent increases in coronavirus as the root cause of current stagnating employment, citing rising case numbers and efforts to contain the virus as the reason for the first rise in the number of unemployed people in the U.S since the April peak.
December was the deadliest month of the COVID pandemic so far in the U.S., and many states started to impose stricter guidelines to prevent the spread of the disease. This prompted a repeat of several of the trends we saw early in the pandemic - increased temporary unemployment, increased teleworking, and significant job losses in the hospitality and leisure industry, in particular.
The latest Bureau of Labor Statistics’ news release on Friday, January 8th, shows how the latest COVID-19 wave has impacted businesses and hiring across a variety of industries. Continue reading for a few of our takeaways from the release, or scroll down for an infographic that shows some of the most important data points.
- Recovery screeched to a halt in December as the unemployment rate stayed stagnant at 6.7%. Last month, we noted that November has been the slowest month for recovery since the start of the pandemic. December’s flat month - and overall job losses - could indicate a troubling trend. If COVID-19 rates stay high, this winter could undo much of the progress that was done over the past 6+ months to recover from the initial unemployment surge in April.
- A few industries still saw job growth during the holiday season. Most notably, the retail industry added 121,000 jobs in December, led by general merchandise stores, and warehousing and transportation added 47,000 jobs. The continued growth in these industries helped to offset losses in the hospitality and leisure industry.
- The impact of COVID-19 on employment is rising. The number of people who report being prevented from looking for work due to the pandemic rose in December from 3.9 million to 4.6 million. In addition, there was a rise in people unable to work because their employer was closed or lost business due to the pandemic, which rose by 1 million to 15.8 million persons. Even the number of employed people who teleworked because of the pandemic rose in December, moving from 21.8% to 23.7%.
- The hospitality and leisure industry is bearing the brunt of December’s job losses. Alone, employment in the hospitality and leisure industry decreased by 498,000, with the largest losses coming from food services and drinking places (-372,000 jobs). While this industry had been enjoying large gains in previous months (+31,000 jobs in November, +271,000 in October, +318,000 in September), December was a stark reversal and overall the industry is down by 3.9 million jobs when compared to February 2020.
Learn more from the infographic below:
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