Employment conditions in the US mostly leveled off while arguably taking a slight turn for the worse in December after having improved continuously since the mid-summer unemployment peak.
In the most recent report from the Bureau of Labor Statistics, total unemployment remained at 6.7% – exactly where it had been in the previous month – although the total number of unemployed persons did in fact tick up ever so slightly from 10.728 million to 10.736 million. On human terms this change represents an increase of 8,000 people, but at this scale an increase of .08% simply registers as a rounding error, which is why the unemployment rate as reported holds steady from one month to the next.
To provide additional context via a longer timeline, the US is still 3.2% above the unemployment figures from February 2020 when the unemployment rate was reported at 3.5% prior to the pandemic’s effects setting in for the most part. Further, the unemployment rate is currently down 8.1% from the peak unemployment rate of 2020, registered in April at 14.8%.
Total non-farm payroll employment figures declined by 140k in December – a significant change from the November report which accounted for the addition of 245,000 new jobs and an end to the months-long trend of positive job growth. Some sectors did in fact register positive job growth (including professional and business services, retail trade, and construction), but these gains were not sufficient to offset losses in the leisure and hospitality as well as the private education segments, both of which are clearly still suffering pandemic-related setbacks while the leisure and hospitality industries are also facing seasonal downturns, as well.
Similar to the relative consistency in the unemployment rate from last month to this month, the labor force participation rate currently measures at 61.5% just as it did in November. That figure is down nearly 2% below its 2020 peak from before the pandemic struck in February, but as a whole it has remained largely consistent since June.
Temporary layoffs increased in December by 277k which pushes the number of people who fall into this subset over the 3 million mark. Even at this level, however, the number of people currently experiencing temporary unemployment remains less than 1/6th of the 18 million people that were registered as such in the April report.
Finally, while the number of long-term unemployed (those jobless for 27 or more weeks) is essentially unchanged from November to December at approximately 4 million people, the number of newly filed jobless claims by people who have been out of work less than 5 weeks increased by nearly 450k to a total of 2.9 million people. Put another way, the increase of newly filed jobless claims relative to last month was a little over 1/6th.
In conclusion, December finally put a halt to the recovery that had been consistently positive (despite slowing in pace significantly in recent months) and now appears to have leveled off entirely with an arguable turn for the worse depending on how seasonality is factored into the equation. With the pandemic stretching over 40 months in the US, with the heart of the winter months and traditional flu season still to come, and with many unknown variables about the timeline and execution for the continuing COVID-19 vaccination rollouts (among other uncertainties), there are more questions than answers about when we can expect to see positive gains in the employment situation and how fast can we expect those gains to occur once the numbers start moving in the right direction again.