The December jobs numbers were disappointing all the way around. Not only do they show a sinking economy, but they show the lingering power of the pandemic over economic growth.
December saw many more widespread lockdowns as positive test result numbers surged upward and hospital ICUs filled with patients. Those lockdowns led to restrictions similar to those that were imposed last spring, which brought the numbers down before they went back up again after the states reopened.
It appears that we’re condemned to repeating this cycle for years.
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The Labor Department released its December jobs report Friday morning at 8:30 a.m. ET. Here were the main results from the report, compared to consensus estimates compiled by Bloomberg:
Change in non-farm payrolls: -140,000 vs. +50,000 expected and a revised +336,000 in November
Unemployment rate: 6.7% vs. 6.8% expected and 6.7% in November
Average hourly earnings, month-over-month: 0.8% vs. 0.2% expected and 0.3% in November
Average hourly earnings, year-over-year: 5.1% vs. 4.5% expected and 4.4% in November
December’s drop in payrolls widened the employment deficit in the labor market from before the pandemic, bringing the economy still more than 9.8 million payrolls short of its February levels. This came even as the payroll gains for each of October and November were upwardly revised by a combined 135,000.
Those gains in hourly earnings are welcome. It’s just too bad there are fewer workers able to enjoy them.
Many of those workers are in restaurants, hotels, motels, and other hospitality businesses. Is the virus any worse an option for these people?
“Today’s report is a harsh reminder that the pandemic controls our economic trajectory,” Daniel Zhao, Glassdoor senior economist, said in an email Friday. “Though the end-of-year relief bill offered temporary reprieve and the start of vaccine distribution offers light at the end of the tunnel, we’re not out of the woods yet.”
Service-sector jobs especially bore the brunt of the job losses in December, unwinding some of their recent recovery. Leisure and hospitality employment sank by 498,000 jobs during the month after gaining 340,000 between October and November, and the industry group remains nearly 4 million payrolls short of its February levels. Education and health services payrolls dropped by 31,000 in December.
The numbers came in before the recent $900 billion stimulus package had a chance to work its way into the economy. Now, with control of the Senate, Democratic Party advocacy groups representing every liberal constituency under the sun will be lining up to collect for getting Joe Biden elected. It will be a feeding frenzy on Capitol Hill, the likes of which has never been seen.
Democrats have promised another stimulus bill with individual checks for $2,000 for every American. The total price tag for the bill is likely to be far north of $3 trillion. There will be billions of dollars for programs that have nothing to do with pandemic relief. Money for economic and social justice schemes, housing, and don’t forget aid to states to close their “budget deficits” that will really go to covering up their abominable fiscal policies. All will be outside the room waiting for a seat at the table.
New York Senator William L. Marcy celebrated the victory of President Andrew Jackson by gloating about how Jackson supporters would get the lion’s share of jobs in the new administration. “To the victor belong the spoils,” he said. In this case, it will be taxpayer cash that will belong to the victors — and plenty of it.