The US economy ended seven months in job growth and posted its first net wage loss since April last month, when restaurants laid off crowds of workers with the arrival of the winter months.
The Labor Department reported Friday that the number of non-farm workers fell by 140,000 in December as fears of a Covid-19 resurgence sparked a decline in the number of travel and hospitality jobs. The unemployment rate was 6.7%.
The decline in total employment was worse than the net loss of 50,000 projected by economists.
CNBC examined the net changes in industry for December jobs based on the data included in the employment report.
The broader leisure and hospitality sector saw oversized job losses, almost entirely due to a large number of layoffs in bars and restaurants as winter weather set in across much of the United States
The entire industry lost 498,000 jobs, but the Food Services subsector made 372,000 of the net loss as managers cut chefs, waiters and other staff.
“The decline in wage employment reflects the recent surge in coronavirus (COVID-19) cases and efforts to contain the pandemic,” the government said in its press release.
“In December, job losses in leisure and hospitality and private education were partly offset by gains in professional and business services, retail and construction,” added the Labor Department.
Restaurants across much of the country have had to send workers home as colder weather kept diners away or forced restaurants to welcome diners with limited capacity indoors to slow the spread of Covid-19.
A jogger walks past dining tables under separate domes outside a restaurant on the Georgetown Waterfront in Washington, DC, as a COVID-19 precaution on December 9, 2020.
Almond Ngan | AFP | Getty Images
Government employment losses also contributed to the decline in wages and salaries in December. State and local employment, a huge source of employment in the US, helped reduce the number of people employed in the public sector by 45,000.
Total government employment has fallen by 1.3 million since February.
“With the recent accelerated surge in coronavirus cases and the associated decline in activity, this was not entirely unexpected,” Seema Shah, chief strategist at Principal Global Investors, wrote in an email.
“Still, it won’t go unnoticed by policy makers,” she added. “With a blue sweep controlling Congress, more fiscal stimulus is the be-all and end-all, and today’s data will only support that agenda.”
These losses were partially offset by recruitment in the professional, commercial and retail sectors.
Computer system design and related services employees added 20,300 jobs, while management and technical consultants filled approximately 10,000 positions. Temporary workers, who also come under professional services, gained 67,600.
In the retail sector, motor vehicle and parts dealers hired decent jobs of around 15,000. General merchandise stores, which include warehouse clubs and super centers, have created 59,000 jobs.
Construction also had a decent month with net income of 51,000. The broad industry is still down 226,000 from February, but certain subsets of construction workers, including builders, have effectively reclaimed the jobs lost in March and April.
– CNBC’s Nate Rattner contributed to the coverage.