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Economic News Release
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Commissioner's Statement on the Employment Situation

Transmission of material in this statement is embargoed until 
8:30 a.m. (ET) January 8, 2021.


                           Statement of

                         William W. Beach
                           Commissioner
                     Bureau of Labor Statistics

                      Friday, January 8, 2021


      Nonfarm payroll employment declined by 140,000 in December, 
and the unemployment rate was unchanged at 6.7 percent. The 
decline in payroll employment reflects the recent rise in the 
number of coronavirus (COVID-19) cases and increased efforts to 
contain the pandemic. In December, job losses in leisure and 
hospitality and in private education were partially offset by 
gains elsewhere, particularly in professional and business 
services, retail trade, and construction. 
      
      Substantial job losses related to the coronavirus pandemic 
first occurred in March (-1.4 million) and April (-20.8 million) 
of 2020. As economic activity resumed, employment increased by 
12.5 million from May through November. After declining again in 
December (-140,000), nonfarm employment was below its February 
level by 9.8 million, or 6.5 percent. 
      
      The response rate for the establishment survey was about 
average in December. The rate for the household survey, while 
slightly below normal due to pandemic-related issues, was much 
higher than earlier in the pandemic. The impact of the pandemic 
on the household and establishment surveys is detailed in the 
December Employment Situation news release and accompanying 
materials (available on the BLS website at 
www.bls.gov/news.release/archives/empsit_01082021.htm). 
      
      Taking a closer look at the December payroll data, 
employment in leisure and hospitality decreased by 498,000. Job 
losses in food services and drinking places (-372,000) accounted 
for three-quarters of the decline, as many restaurants and bars 
closed or curtailed operations in December due to the pandemic. 
Elsewhere in leisure and hospitality, employment decreased by 
92,000 in amusements, gambling, and recreation and by 24,000 in 
accommodation. Since February, employment is down by 3.9 million 
in leisure and hospitality, including a decline of 2.5 million 
in food services and drinking places. 
      
      Employment in private education declined by 63,000 in 
December and is down by 450,000 since February. 
      
      In December, government employment declined by 45,000. Job 
losses occurred in state government education (-20,000) and in 
local government, excluding education (-32,000). Since February, 
government employment has declined by 1.3 million.
      
      Employment in the other services industry declined by 
22,000 in December and is down by 453,000 since February. Within 
the industry, personal and laundry services lost 12,000 jobs 
over the month.  
      
      Employment in professional and business services rose by 
161,000 in December, led by a gain of 68,000 in temporary help 
services. 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) also added jobs over the month. 
Employment in professional and business services has risen by 
1.4 million since a recent low in April but remains 858,000 
below its February level. 
      
      Retail trade added 121,000 jobs in December, but employment 
in the industry is down by 411,000 since February. In December, 
job gains occurred in the component of general merchandise 
stores that includes warehouse clubs and supercenters (+59,000), 
in nonstore retailers (+14,000), in automobile dealers 
(+13,000), and in health and personal care stores (+10,000). 
      
      Construction added 51,000 jobs in December, but employment 
in the industry is down by 226,000 since February. Within the 
industry, employment grew over the month in residential 
specialty trade contractors (+14,000) and residential building 
(+9,000); these residential components have recovered all of 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). 
      
      In December, employment in transportation and warehousing 
increased by 47,000, mostly in couriers and messengers 
(+37,000). In addition, job gains occurred in warehousing and 
storage (+8,000), truck transportation (+7,000), and air 
transportation (+3,000). Transit and ground passenger 
transportation lost jobs (-9,000). Employment in transportation 
and warehousing is down by 89,000 since February; over the same 
period, employment in the couriers and messengers component has 
risen by 222,000. 
      
      Health care added 39,000 jobs in December. Job gains in 
hospitals (+32,000) and ambulatory health care services 
(+21,000) were partially offset by losses in nursing care 
facilities (-6,000) and community care facilities for the 
elderly (-5,000). Despite job growth of 1.1 million since April, 
employment in health care is 502,000 lower than in February.
      
      In December, manufacturing employment increased by 38,000. 
Within durable goods, job gains occurred in motor vehicles and 
parts (+7,000) and nonmetallic mineral products (+6,000). In 
nondurable goods, job gains occurred in plastics and rubber 
products (+7,000), apparel (+4,000), and petroleum and coal 
products (+3,000). By contrast, miscellaneous nondurable goods 
manufacturing lost 11,000 jobs. Employment in manufacturing is 
down by 543,000 since February.
      
      Wholesale trade added 25,000 jobs over the month, including 
11,000 jobs each in durable goods and in nondurable goods. 
Employment in wholesale trade is down by 251,000 since February.
      
      Employment in other major industries--including mining, 
information, and financial activities--showed little change over 
the month. 
      
      Average weekly hours for all private-sector workers 
decreased by 0.1 hour in December to 34.7 hours. The average 
workweek for manufacturing was unchanged at 40.2 hours.
      
      Average hourly earnings of all employees on private nonfarm 
payrolls increased by 23 cents in December to $29.81. This 
increase largely reflects the disproportionate number of lower-
paid workers in leisure and hospitality who went off payrolls, 
which put upward pressure on the average hourly earnings 
estimate.
      
      Turning to the labor market indicators from the household 
survey, the unemployment rate was unchanged at 6.7 percent in 
December, and the number of unemployed people was also unchanged 
at 10.7 million. Both measures have fallen from their recent 
peaks in April but remain nearly twice their February levels 
(3.5 percent and 5.7 million, respectively). 
      
      Among the major worker groups, the unemployment rates for 
teenagers (16.0 percent) and Hispanics (9.3 percent) increased 
in December. The jobless rates for adult men (6.4 percent), 
adult women (6.3 percent), Whites (6.0 percent), Blacks (9.9 
percent), and Asians (5.9 percent) showed little change.
      
       Among the unemployed, the number on temporary layoff, at 
3.0 million, increased by 277,000 in December. Although the 
number of people on temporary layoff is down considerably from 
the high of 18.0 million in April, it is 2.3 million higher than 
in February. The number of permanent job losers declined by 
348,000 to 3.4 million in December but is up by 2.1 million 
since February. The number of unemployed reentrants increased by 
282,000 over the month to 2.3 million. 
      
      By duration of unemployment, the number of people searching 
for work for less than 5 weeks increased by 449,000 over the 
month to 2.9 million, and the number of people jobless for 15 to 
26 weeks decreased by 303,000 to 1.6 million. The number of 
people searching for work for 27 weeks or more (often referred 
to as the long-term unemployed), at 4.0 million in December, was 
about unchanged over the month but is up by 2.8 million since 
February. In December, the long-term unemployed accounted for 
37.1 percent of unemployed people, up from 19.3 percent in 
February.  
      
      The labor force participation rate remained at 61.5 percent 
in December, and the employment-population ratio was 57.4 
percent for the third consecutive month. Since February, the 
participation rate is down by 1.8 percentage points, and the 
employment-population ratio is down by 3.7 percentage points.
      
      In December, the number of people working part time for 
economic reasons (also referred to as involuntary part-time 
workers) decreased by 471,000 to 6.2 million, after little 
change in November. The number of people affected by this type 
of underemployment in December is 4.7 million lower than the 
recent peak in April but is 1.8 million higher than it was in 
February.
      
      At 7.3 million, the number of people not in the labor force 
who currently want a job was little changed in December but 
remains 2.3 million higher than in February. 
      
      Among those who were not in the labor force but wanted a 
job, 2.2 million were considered marginally attached to the 
labor force in December, little changed from November but up by 
749,000 since February. (People who are marginally attached to 
the labor force had not actively looked for work in the 4 weeks 
prior to the survey but had looked for a job within the last 12 
months.) The number of discouraged workers, a subset of the 
marginally attached who believed that no jobs were available for 
them, at 663,000, was essentially unchanged over the month. This 
measure is 262,000 higher than it was in February.  
      
      Since March, household survey interviewers have been 
instructed to classify employed people absent from work due to 
temporary, coronavirus-related business closures or cutbacks as 
unemployed on temporary layoff.
      
      As occurred in previous months, some workers affected by 
the pandemic who should have been classified as unemployed on 
temporary layoff in December were instead misclassified as 
employed but not at work. However, the share of responses that 
may have been misclassified was considerably smaller in recent 
months than at the onset of the pandemic.
      
      For March through November, BLS published an estimate of 
what the unemployment rate would have been had misclassified 
workers been included among the unemployed. Repeating this same 
approach, the overall December unemployment rate would have been 
0.6 percentage point higher than reported. However, this 
represents the upper bound of our estimate of misclassification 
and probably overstates the size of the misclassification error. 
Additional information is available on the BLS website at 
www.bls.gov/covid19/employment-situation-covid19-faq-december-
2020.htm. 
      
      Looking at supplemental pandemic-related measures from the 
household survey (these supplemental data are not seasonally 
adjusted), 23.7 percent of employed people teleworked in 
December because of the coronavirus pandemic, up from 21.8 
percent in November. These data refer to employed people who 
teleworked or worked at home for pay at some point in the last 4 
weeks specifically because of the pandemic.
      
      In December, 15.8 million people reported that they had 
been unable to work because their employer closed or lost 
business due to the pandemic--that is, they did not work at all 
or worked fewer hours at some point in the last 4 weeks due to 
the pandemic. This measure is up from 14.8 million in November. 
Among those who reported in December that they were unable to 
work because of pandemic-related closures or lost business, 12.8 
percent received at least some pay from their employer for the 
hours not worked, little changed from November. 
      
      Among those not in the labor force in December, 4.6 million 
people were prevented from looking for work due to the pandemic, 
up from 3.9 million in November. (To be counted as unemployed, 
by definition, individuals must either be actively searching for 
work or on temporary layoff.)
      
      Following our regular annual practice, seasonal adjustment 
factors for the household survey data have been updated with the 
release of December data. Seasonally adjusted estimates going 
back 5 years--to January 2016--were subject to revision. 
      
      In summary, nonfarm payroll employment decreased by 140,000 
in December, and the unemployment rate held at 6.7 percent.



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Last Modified Date: January 08, 2021