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The Country Lost Jobs in December, Which Was Totally Predictable

Empty outdoor dining tables with umbrellas and American flag dividers between them
Shuttered outdoor restaurant seating in West Hollywood, California, on Dec. 7. Mario Tama/Getty Images

One of the major reasons just about anybody paying attention to the economy spent the late summer and fall screaming their heads off for Congress to pass some sort of new coronavirus relief bill was that they could see a rough winter was coming. Cold weather and a potential new wave of the pandemic threatened to shut down outdoor drinking, dining, and travel in much of the country, leading to layoffs and closures at hospitality businesses that were already barely hanging on. We needed to get support to businesses so they could keep people on payroll and offer help to families to avoid economic backsliding and prevent the combination of a plague and freezing temperatures from ruining a lot of people’s holidays.

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In the end we didn’t get a relief bill until after Christmas, and things seem to have played out more or less like many feared. The government reported Friday that the U.S. lost 140,000 jobs in December, suggesting that our economic recovery screeched to a halt. But the pain wasn’t spread evenly. Employers in most major sectors, such as manufacturing, construction, retail, finance, health care, and business services like accounting, added to their payrolls. The problem is that the leisure and hospitality sector shed 498,000 workers, including 372,000 at restaurants and bars. Part of the issue may have been the cold. Part of it may have been the resurgent pandemic that led to new shutdowns in states like California.

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Those numbers are based on the government’s monthly establishment survey, which asks employers how many workers are on their payrolls. The picture was somewhat brighter if you turned to the household survey, which asks individuals about their work situation and is used to calculate stats like the unemployment rate. It showed that the number of Americans with a job increased ever so slightly, by about 21,000, while labor force participation remained unchanged. The number of Americans who said they had permanently lost their job actually fell—which is very good news, all else considered. At the same time, the number of part-time workers fell significantly, while the number of people on temporary layoffs rose. It’s all pretty consistent: Most industries muddled along, while restaurants and bars furloughed and laid off mass numbers of part-time waiters, bartenders, and cooks.

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State and local governments, which laid off 45,000, were another serious dark spot. Many of those losses were in the state-level education sector (so, financially strapped colleges letting staff go), but well over half were in local government outside schools, which suggests that without aid cities and towns are fully in austerity mode.

All things considered, these numbers could have been worse. The Bureau of Labor Statistics also revised up its job estimates from the past two months by 135,000, meaning the recovery has been slightly stronger than we thought. But the bottom line is that hiring has slowed down each month since June, and now that winter has arrived, the economy is looking pretty hypothermic. Hopefully the relief bill that we did finally pass, and the new administration, will be able to warm it up sooner rather than later.

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