MNI DATA IMPACT:US Job Recovery Reverses; 1st Time Since April

U.S. payrolls growth fell in December for the first time since bottoming out in April as daily Covid-19 case counts reached all-time highs and municipalities across the country closed contact-heavy businesses like bars and restaurants through the month, the Bureau of Labor Statistics said Friday.

The economy shed 140,000 jobs in December, a result far worse than market expectations for 50,000 payrolls added. December employment was down 9.8 million, or 6.5%, from February, the BLS said.

Nearly 16 million people reported being unable to work in December because their employer had closed or lost business due to the Covid-19 pandemic, 1 million more than in November.

November's 245,000 gain was revised up to 336,000, and net revisions for the previous two months were a positive 135,000, bringing the three-month average to 283,333 in jobs gained.

SERVICES JOBS LOST

Total private payrolls fell 95,000 in December when markets had forecast a gain of 344,000. Private service-producing payrolls fell 188,000, driven by job loss in leisure and hospitality (-498,000) and education and health services (-31,000).

Meanwhile, retail sector jobs grew by 120,500, likely a result of the holiday shopping season. Jobs in professional and business services were up 161,000, driven by a 68,000 increase in temporary staffing. Manufacturing and construction also netted gains.

Government employment declined for the fourth consecutive month, falling by 45,000 in December. Local government jobs excluding education fell by 32,000, the BLS said. State government education lost 20,000 jobs, while federal government employment increased by 6,000.

The unemployment rate in December was unchanged at 6.7% when markets had expected a slight increase to 6.8%. The participation rate was also unchanged at 61.5%, as was the employment-population ratio at 57.4%.

2 MILLION PERMANENT JOB LOSERS

The median duration of unemployment plummeted in December, falling to 16.1 weeks from a revised 18.8 weeks in November.

But the number of long-term unemployed held steady at 4 million, up 2.8 million since February. Long-term unemployment accounted for 37.1% of the total unemployed in December, the BLS said, up slightly from 36.9% in November.

Those that have lost their jobs permanently fell by 348,000 in December to 3.4 million. That's still up 2.1 million since February. Unemployed reentrants increased by 282,000 through the month to 2.3 million.

The U-6 rate, which accounts for discouraged workers, fell by three-tenths to 11.7% in December from the prior month. Those marginally attached to the labor force was little changed at 2.2 million, while discouraged workers, a subset of the marginally attached, was unchanged at 663,000, up 262,000 from February.

The length of the average workweek fell only slightly to 34.7 hours in December. Average hourly earnings were up 0.8% after rising 0.3% in November. From a year earlier, earnings were up 5.1%.