The attached file contains this articles commentary as well as tables and charts of the data.
Employment: Leisure and Hospitality Jobs Plunge
January 8, 2021
Bottom Line: Jobs fell in December, below the consensus estimate for December, but there were positive revisions to prior months' data that mostly offset the miss. And relative to what was implied from Wednesday's ADP report and the employment component of the ISM services survey yesterday, this report was a touch better than we expected. Amid renewed shutdowns for the virus jobs in the leisure and hospitality sector fell sharply, down nearly 500k and offsetting modest gains in most other sectors. The brunt of the job losses was in lower-paying industries, sending average hourly earnings higher as the index of aggregate weekly hours fell. The household survey showed a slight increase after significant volatility in recent months The participation rate was mostly steady, leaving the unemployment unchanged at 6.7%. Overall, this report once again showed the importance of the leisure and hospitality sector to marginal changes in the US labor market. While there is medium-term hope that vaccines will allow reopenings and re-hiring, the next several months will likely see continued weakness in jobs. Moreover, there are few signs that overall employment can return to pre-pandemic levels even within a few quarters of herd immunity.Payroll Employment fell by 140k in December, compared with market expectations for an increase of 460k. The prior 2 months were revised, higher in November by 91k and higher in October by 44k.Government jobs FELL by 45k. Consequently, private sector jobs FELL by 95k. Private education jobs fell by 63k. State and Local education jobs fell by -20k. Overall employment is now -6.2% BELOW its year-ago level. Over the past 12 months, 9,374k jobs have been shed.In December, the job gains were in:
- Trade, Transportation & Utilities (+71k with 121k of those in Retail Trade),
- Professional & Business Services (+161k with the addition of 67.6k in Temp Help Services),
- Construction (+51k),
- Manufacturing (+38k),
- Education & Health Services (+32k),
- Financial Activities (+12k),
Jobs were shed in
- Government (-45k), and
- Leisure & Hospitality (-498k)
The Unemployment Rate was UNCHANGED in December at 6.7%, in-line with market expectations.Household employment rose by 21k while the labor force increased by 31k, resulting in an increase in the number of unemployed of 8k.The Labor Force Participation Rate was UNCHANGED at 61.5%.The Employment-Population Ratio was UNCHANGED at 57.4%.The number of people Working Part-Time for Economic Reasons FELL by 500k to 6,082k. while Long-Term Unemployment ROSE by 27k to 3,956k (accounting for 36.8% of the unemployed), while the Mean Duration of Unemployment ROSE by 0.4 weeks to 23.4 weeks.There are now 10.7 million people officially unemployed. In addition, there are another 7,331k people who say they want a job but are not currently looking for one. Finally, another 6,082k people are working part-time because of slack economic conditions.The Index of Aggregate Hours FELL by 0.4%, combining the change in private payroll employment and the shorter workweek.Hourly Earnings ROSE by 0.8% in December, above market expectations of 0.1%. Hourly earnings are now 5.1% ABOVE their year-ago level.Weekly Earnings also ROSE by 0.5%, the result of the change in hourly earnings and a shorter workweek. Weekly earnings are now 6.3% ABOVE their year-ago level.The Average Workweek FELL by 0.1 to 34.7 hours, ABOVE the market consensus at 34.6 hours.
Article by Contingent Macro