What to watch on jobs day: Little to no improvement in December and huge losses over 2020

Jobs day on Friday will not only give us a read on the labor market for December, but it will also give us a sense of the devastating economy of 2020 and the economy President-elect Biden is walking into. Overall job growth for December will likely continue to trend toward zero, with some chance of employment actually falling. At the same time, rising COVID-19 caseloads, hospitalizations, and deaths means our health and economic woes are far from over. President-elect Biden is inheriting an exceedingly troubled economy with millions of families just trying to stay afloat. Over the Trump administration’s term, more jobs were lost than gained—there are 541,000 fewer jobs in the U.S. economy than when he took office in January 2016. And not only does President-elect Biden enter his first term in a disastrous economy, he also inherits a litany of anti-worker policy decisions from his predecessor who squandered the labor market strength he inherited.

The figure below provides a decent picture of the employment situation over the last year. In January and February, we saw solid job growth with gains of 214,000 and 251,000, respectively. After COVID-19 hit, federal legislation expanded unemployment insurance, increasing both eligibility and weekly payments, making it financially viable for millions of workers to safely stay home while public health officials assessed the situation. However, businesses that were shuttered in the interest of public health received insufficient federal economic support to keep paying their workers even as they remained safely at home. The U.S. economy experienced losses in March and April of 1.4 million and 20.8 million jobs, respectively, losses the likes of which we hadn’t experienced in modern history. Millions were on temporary layoff and once states started opening back up, some of those were rehired. We saw a significant bounce back in May and June with 2.7 million and 4.9 million jobs added, respectively. Unfortunately, over the succeeding five months, job growth has rapidly slowed as federal relief expired and the virus surged: 1.8 million in July down to 1.5 million in August then 711,000, 610,000, and a paltry 245,000 in November. December looks to continue the trend with low (or even negative) job growth expected.

As of mid-November, 26.1 million workers were hit by the COVID-19 downturn, including 10.7 million officially unemployed, 3.3 million unemployed but misclassified as employed or not in the labor force, 5.0 million who had dropped out of the labor force, and 7.1 million employed but experiencing a cut in pay and hours. Further, the recovery, such as it is, has revealed increasing disparities, with employment shortfalls greater for Black and Hispanic workers than for white workers. The latest congressional relief bill is an important step toward addressing some of this pain, but it is not at the scale of the problem. I’m hopeful that more relief measures are on the horizon for increasingly desperate workers and their families. Senate Republicans forced the December bill to be far too small. Fortunately, with the Democratic majority in the Senate given the results of the Georgia runoffs, Democrats will now be able to get more relief measures through reconciliation. Top priorities must be aid to state and local governments and further extensions of unemployment insurance.

Jobs day

Monthly change in payroll employment, January 2020–March 2021

Date Change in Employment
Jan-2020 315
Feb-2020 289
Mar-2020 -1,683
Apr-2020 -20,679
May-2020 2,833
Jun-2020 4,846
Jul-2020 1,726
Aug-2020 1,583
Sep-2020 716
Oct-2020 680
Nov-2020 264
Dec-2020 -306
Jan-2021 233
Feb-2021 468
Mar-2021 916
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Source: EPI analysis of Bureau of Labor Statistics' Current Employment Statistics public data series

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