The U.S. economy ended seven months of job gains and posted its first net payrolls loss since April last month as restaurants laid off droves of workers with the arrival of the winter months.
The Labor Department reported Friday that total nonfarm payroll employment fell by 140,000 in December as fears over a Covid-19 resurgence sparked a backslide in travel and hospitality job numbers. The unemployment rate held at 6.7%.
The decline in total payroll employment was worse than the net loss of 50,000 that economists had forecast.
CNBC studied the net changes by industry for December jobs based on data contained in the employment report.
The broad leisure and hospitality sector saw outsized job losses thanks almost entirely to a torrent of layoffs at bars and restaurants as winter weather begins across much of the U.S.
The entire industry lost 498,000 jobs, but the food services subsector accounted for 372,000 of the net loss as managers cut cooks, waiters and other dining staff.
“The decline in payroll employment reflects the recent increase in coronavirus (COVID-19) cases and efforts to contain the pandemic,” the government said in its release.
“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 Labor Department added.
Eateries throughout much of the country had to send workers home as colder weather kept patrons away or forced restaurants to welcome diners at limited indoor capacity to help slow the spread of Covid-19.
A jogger runs past dining tables under separate domes as COVID-19 precautions outside of a restaurant on the Georgetown waterfront in Washington, DC on December 9, 2020.
Mandel Ngan | AFP | Getty Images
Government employment losses also contributed to December’s payrolls decline. State and local government employment, a huge source of jobs in the U.S., helped send public sector payrolls down 45,000.
Since February, government employment overall is down by 1.3 million.
“Given the accelerated rise in coronavirus cases recently and the associated drop back in activity, this was not entirely unexpected,” Seema Shah, chief strategist at Principal Global Investors, wrote in an email.
“Yet it will not go unnoticed by policymakers,” she added. “With a Blue sweep controlling Congress, further fiscal stimulus is the name of the game and today’s data will only assist that agenda.”
Partially offsetting those losses was hiring in the professional and business and retail sectors.
Workers in computer system design and associated services saw a gain of 20,300 jobs while management and technical consultants picked up about 10,000 positions. Temporary help workers, who are also categorized under professional services, gained 67,600.
In the retail sector, motor vehicle and parts dealers saw decent hiring of about 15,000. General merchandise stores, a category that includes warehouse clubs and supercenters, added 59,000 jobs.
Construction saw a decent month as well with a net gain of 51,000. The broad industry is still down 226,000 compared with its February level, but specific construction worker subgroups including residential builders have effectively gained back the jobs lost in March and April.
— CNBC’s Nate Rattner contributed reporting.