US loses jobs, first fall since April last year
US employers shed jobs last month for the first time since April, cutting 140,000 positions, clear evidence that the economy is faltering as the viral pandemic tightens its grip on consumers and businesses.
The unemployment rate stayed at 6.7 percent, the first time it hasn’t fallen since April.
Figures from the Labor Department depict a sharply uneven job market, with losses concentrated among restaurants, bars, hotels and entertainment venues, many of them affecting low-income employees, while most other sectors are still adding workers.
Still, the nation has nearly 10 million fewer jobs than it did before the pandemic sent it into a deep recession nearly a year ago, having recovered just 56 percent of the jobs lost in the spring.
The coronavirus pandemic will likely continue to weaken the economy through winter and perhaps early spring, and further job losses are possible in the coming months. But many economists say that once coronavirus vaccines are more widely distributed, a broader recovery should take hold in the second half of the year.
The incoming Biden administration, along with a now fully Democrat-led House and Senate, is also expected to push more rescue aid and spending measures that could accelerate growth.
“Hopefully it is indeed darkest before the dawn,” said Leslie Preston, senior economist at TD Bank. “We’ve got the vaccine and the stimulus, which are imminent, and which we do expect to turn things around.”
Last month, restaurants, bars, hotels, casinos, movie theaters and other entertainment venues shed nearly 500,000 jobs, the most since April, when nationwide shutdowns triggered 7.6 million layoffs.
While those employers will regain some jobs as the economy recovers, changing consumer habits will likely mean that a portion will be gone for good. Business travel, for example, may not return to pre-pandemic levels.
Most other industries added jobs in December, with manufacturers, construction companies, and higher-paying professional services such as architecture, engineering and accounting hiring workers.
The huge disparities among industries are sure to fuel economic inequality, given that most of the job losses are in lower-paid industries, while middle- and higher-paid workers have largely remained employed.
Data suggests that the pandemic economy is continuing to benefit some sectors, with transportation and warehousing adding nearly 47,000 jobs. E-commerce firms also ramped up hiring. Delivery jobs rose 37,000.
“We’re seeing huge rotation here,” said Brian Bethune, an economist at Tufts University. “The higher-paying goods-producing industries are doing well. Unfortunately, the leisure and hospitality industries are still getting whacked.”
Under financial pressure, consumers spent less during the holiday shopping season than in previous years, based on debit and credit card data tracked by JPMorgan Chase. Spending was 6 percent lower in December than a year ago, worse than in October.