U.S. Job Recovery Ended in December

The steady recovery from job losses that occurred during the pandemic’s onset officially ended in December as the unemployment rate’s descent has stalled and job losses surpassed gains.

The monthly jobs report from the U.S. Bureau of Labor Statistics (BLS) shows that the estimated unemployment rate remained at 6.7% in December and that the number of unemployed persons did not change — 10.7 million. Both are approximately two-times higher than before the pandemic hit.

After the initial, massive increase in unemployment in the spring, the U.S. saw a steady increase in job gains that peaked in June. Since then, the job gains shrank each month, until this month when net job growth was negative for the first time since April. Total employment decreased in December by approximately 140,000 jobs.

The leisure and hospitality industry lost nearly half a million jobs in December, most of them in the food and drinking services sector.

The declines seen in that industry and others like government work and private education were slightly offset by gains in the retail trade, professional business services, construction and transportation industries.

More people lost work because the pandemic affected their place of employment in December more than the previous month. The jobs report states that 15.8 million people were unable to work in December because their employer lost business or closed due to the pandemic. A total of 4.6 million people were prevented from working in December because of the pandemic.

The number of people that permanently lost their jobs decreased in December, as did the number of people that have been unemployed for 15 to 26 weeks. Meanwhile, the number of people that are temporarily laid off or have been out of work for a short period of time increased in December.

The percentage of people working from home once again rose in December from 21.8% to 23.7%.

With job growth stalled nationally, unemployment continues to come in at levels unprecedented before the pandemic.

In Wisconsin, nearly 26,000 people filed initial claims for unemployment in the past seven days. During that same period last year, there were 12,710 claims for unemployment. Across the U.S. 787,000 people filed initial unemployment claims last week, and there were 160,460 claims for Pandemic Unemployment Assistance (PUA), a federal program for people that don’t qualify for traditional state insurance, according to the U.S. Department of Labor.

During the week ending December 19th, there were approximately 10 times as many people claiming some form of unemployment assistance as there was during that week in 2019.

A federal program called Pandemic Emergency Unemployment Compensation (PEUC) was created for people that have run out of their traditional unemployment insurance. The latest data shows the number of claims to the program is decreasing, as of December 19th. 

This program has been a fairly reliable indicator of rising or falling long term unemployment, defined by the BLS as those out of work for 27 weeks or more. According to the labor department, there were approximately 4.5 million people claiming the program as of December 19th. The December jobs report estimates that the number of people currently experiencing long term unemployment to be four million. This group makes up approximately 37% of all the unemployed people in the country.

Read the BLS report here. Read the Labor Department Report here.