Reflections on the December 2020 BLS Report

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If you told people in January of 2020 what was in store for the year, many would find it confusing and hard to believe, but lots of us might have thought that by January of the next year, we would be done dealing with the ensuing events. Yet, today, we are battling the COVID-19 pandemic just as much as we were in April of last year. Thankfully, we have learned ways to adapt to living and working through a pandemic, and job numbers are nowhere near as bad as they were months ago. December numbers did dip, however, in a disappointing end to a dismal year.

The U.S. Bureau of Labor Statistics' Employment Situation report showed that December become the first month since April to see a decrease in employment. The unemployment rate stayed unchanged at 6.7%, but the nonfarm payroll employment declined by 140,000. Notable losses occurred in leisure and hospitality as well as private education, although these were slightly offset by gains in business services, retail, and construction.

Screen Shot 2021-01-08 at 9.35.29 AMGraphs from BLS Employment Situation Report

Prior to December, the U.S. had seen job gains for eight consecutive months, although, as depicted in the graph above, they were growing by less and less each month since July. The decline in jobs can be attributed to the worsening pandemic which has caused many businesses to limit their service or shut down completely. Accordingly, economists anticipated this month to show weak results, so these numbers are only a little worse than expected.

In December, teenagers and Hispanics saw their unemployment rates go up the most out of the major work groups, by 2% and 1%, respectively. The number of people with permanent job losses did decline by 348,000, but the number of people temporarily laid off increased by 277,000. The labor force participation rate currently sits at 61.5% and the total number of unemployed people is around 10.7 million people. This is still over 4 million people higher than in February.

Accounting for much of the unemployment seen in December is layoffs in the leisure and hospitality industry, where 498,000 jobs were lost throughout the month. Three-quarters of those came from food and drink services. Additionally, employment declined in private education by 63,000 and in government by 45,000. 

On the brighter side, professional and business services saw an employment boost of 161,000 this month, with many of the gains coming from temporary help services, computer and technical services, and other business support services. Retail also saw growth, with 121,000 added jobs in December, much of which came from general merchandise stores and supercenters. Construction, logistics and transportation, health care, and manufacturing also saw increased employment.

In December, the average hourly earnings went up to $29.81, in large part due to the loss of many lower-paid hourly workers in leisure and hospitality. The average workweek remained mostly unchanged and currently sits at 34.7 hours. 

This month's household survey data showed that:

  • 23.7 percent of employed people worked from home in some fashion due to the pandemic.
  • 15.8 million people reported that they had been unable to work because their employer closed or lost business due to the pandemic. This is 1 million more people than in November.
  • Among those who reported in December that they were unable to work because of pandemic-related closures or lost business, 12.8 percent received at least some pay from their employer for the hours not worked.
  • 4.6 million people not in the labor force in December were prevented from looking for work due to the pandemic.

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As we enter the new year, many of us are hopeful that our economic situation, as well as our public health situation, will find some resolution. 

Talroo has provided research, resources, and reflections throughout the pandemic. We will continue to monitor and report on how various forces affect the labor market. 

Topics: Recruiting Industry

Updated January 8, 2021