• US loses 140,000 jobs in December
• Unemployment rate unchanged at 6.7%
• Wage growth increased 0.8% mom and 5.1% yoy
• Labor force participation rate unchanged at 61.5%
• COVID is still holding sway over the job growth

The US lost jobs in December for the first time in eight months as the coronavirus bore down on the economy again and forced businesses to resort to more layoffs. US nonfarm payrolls (NFP) fell by 140k in December. The decline in employment was the first since last April, when the US lost a gargantuan 20.8 million jobs in that one month alone. The unemployment rate remained unchanged from November at 6.7%.

The decline in payroll employment reflects the recent increase in 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 biggest losses were in the leisure and hospitality (-498k), concentrated in bars and restaurants (-372k). Employment in the sector remains 23% lower than February levels. Jobs were also shed within private education (-63k), government (-45k) and other services (-22k), which includes businesses like hair salons. Many sectors continued to add jobs. Professional and business services increased by 161k, retail trade by 121k, construction by 51k, transportation and warehousing by 47k, and manufacturing by 38k.

The change in total nonfarm payroll employment for October was revised up by 44k from +610k to +654k and the change for November was revised up by 91k, from +245k to +336k. With these revisions, employment in October and November combined was 135k more than previously reported.

In December, both the unemployment rate, at 6.7%, and the number of unemployed persons, at 10.7m, were unchanged. The labor force participation rate also unchanged at 61.5%. The average hourly earnings ticked up 0.8% mom and 5.1% yoy in December.

Source: BIMB Securities Research - 11 Jan 2021