Employment Summary for December 2020
Total nonfarm payroll employment declined by 140,000 in December, well below the consensus forecast of a job gain of 45,000. Unemployment rate remained unchanged at 6.7 percent or 10.7 million unemployed persons.
The Bureau of Labor Statistics (BLS) noted in today’s release that both unemployment measures are much lower than their April highs, but still nearly twice their pre-pandemic levels in February (3.5 percent and 5.7 million, respectively). The decline in payroll employment, as reported by the BLS reflects the recent increase in coronavirus (COVID-19) cases and efforts to contain the pandemic. 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.
The BLS reported that in December, 23.7 percent of employed persons teleworked because of the coronavirus pandemic, up from 21.8 percent in November. These data refer to employed persons who teleworked or worked at home for pay at some point in the last four weeks specifically due to the pandemic. This increasing trend to teleworking is confirmed by PrincetonOne recruiters who report many client companies and talented professional workers expect to incorporate some work-from-home days as part of their standard work week schedule as the pandemic eases.
As reported by the BLS, in December, employment in professional and business services increased by 161,000, with a large gain in temporary help services (+68,000). Job growth also occurred in computer systems design and related services (+20,000), other professional and technical services (+11,000), management of companies and enterprises (+11,000), and business support services (+7,000).
Retail trade added 121,000 jobs in December, with nearly half of the growth occurring in the component of general merchandise stores that includes warehouse clubs and supercenters (+59,000). Job gains also occurred in non-store retailers (+14,000), automobile dealers (+13,000), health and personal care stores (+10,000), and food and beverage stores (+8,000).
Construction added 51,000 jobs in December. Employment rose in residential specialty trade contractors (+14,000) and residential building (+9,000), two industries that have gained back the jobs lost in March and April. In December, employment also increased in nonresidential specialty trade contractors (+18,000) and in heavy and civil engineering construction (+15,000).
Employment in transportation and warehousing rose by 47,000 in December, largely in couriers and messengers (+37,000). Employment in couriers and messengers has increased by 222,000 since February. In December, employment also grew in warehousing and storage (+8,000) and in truck transportation (+7,000), while transit and ground passenger transportation lost 9,000 jobs.
In December, healthcare added 39,000 jobs. Employment growth in hospitals (+32,000) and ambulatory healthcare services (+21,000) was partially offset by declines in nursing care facilities (-6,000) and community care facilities for the elderly (-5,000).
Meanwhile, manufacturing employment increased by 38,000, with gains in motor vehicles and parts (+7,000), plastics and rubber products (+7,000), and nonmetallic mineral products (+6,000). By contrast, miscellaneous nondurable goods manufacturing lost 11,000 jobs over the month.
Offsetting these job gains was employment in leisure and hospitality which declined by 498,000, with three-quarters of the decrease in food services and drinking places (-372,000).
Employment also fell in the amusements, gambling, and recreation industry (-92,000) and in the accommodation industry (-24,000).
Employment in private education decreased by 63,000 and government employment declined by 45,000 in December. Employment in the component of local government that excludes education declined by 32,000, and state government education lost 20,000 jobs. Federal government employment increased by 6,000. December can be a slow month in the best of times, so, in spite of the forecast of job gains, seeing a decline in the employment numbers during a pandemic doesn’t come as too much of a surprise. In PrincetonOne’s experience, this is a short-term effect that was further impacted by the pandemic. That being said, PrincetonOne is seeing indications that companies are ready to move forward with hiring. In spite of the recent events in Washington D.C., once the inauguration is complete and the vaccine continues to be administered, the consensus looks to be toward a future of expansion. The vaccine will help the healthcare, manufacturing, hospitality, and healthcare sectors to stabilize while others are looking to create hybrid work from home and office solutions. For some, that will open up the talent market to hiring the best talent regardless of location. Between the establishment of a new administration, the increase in vaccinations, and an easing of geographical limitations on talent, PrincetonOne is confident the future will see increases in many, if not all, sectors.
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