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December job losses driven by coronavirus containment efforts

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Bethany Blankley | The Center Square

(The Center Square) – Total nonfarm payroll employment fell by 140,000 from November to December according to the Bureau of Labor Statistics (BLS) monthly report for December 2020. The unemployment rate remained unchanged at 6.7 percent.

The losses reported in December ended seven consecutive months of job gains as states began implementing stricter economic lockdowns citing increased number of COVID-19 cases as the reason.

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While the BLS argues the decline in payroll employment “reflects the recent increase in coronavirus (COVID-19) cases and efforts to contain them,” the White House argued in a news release that job losses were a result of increasing lockdowns by state governors.

Job losses indicate “the regressive nature of government-mandated closures, and the reduction in economic activity that occurs when individuals are subject to these restrictions,” the White House news release states.

In December, job losses in leisure and hospitality and in private education were partially offset by gains in professional and business services, retail trade, and construction, BLS notes.

The unemployment rate of 6.7 percent is nearly double the 3.5 percent rate of pre-lockdown in February 2020. Although it is an improvement from the peak of 14.8 percent (revised) unemployment rate reached in April.

The unemployment rate for Black Americans fell to 9.9 percent in December, the first month it fell below 10 percent since February.

The unemployment rate for Hispanic Americans increased by 0.9 percentage point to 9.3 percent.

Among the unemployed, the number of individuals on temporary layoff increased by 277,000 in December to 3 million. This number is significantly down from 18 million in April but is 2.3 million higher than in February.

The number of permanent jobs lost declined by 348,000 to 3.4 million in December but is up by 2.1 million since February.

In December, 23.7 percent of workers teleworked because of the coronavirus, up from 21.8 percent in November.

In December, 15.8 million people reported that they had been unable to work because their employer closed or lost business due to their respective state’s shutdown—“that is, they did not work at all or worked fewer hours at some point in the last 4 weeks,” the BLS report states. The number is an increase of one million from November.