Labor Market Recovery Slows as COVID-19 Cases Jump

December 04, 2020

Employers added 245,000 jobs in November and the unemployment rate edged down to 6.7%, yet employment levels in several industries remain 20% or more below their pre-pandemic level.

Since May, the economy has recovered only 55.6% of the jobs lost in March and April.  At the current pace of job growth, it will take another 18 months to replace all of the lost jobs.

Permanent impact of COVID-19 increasing: 44% of the unemployed have permanently lost their jobs compared to 11% in April. 

Long-term unemployment (27 or more weeks) is 2.8 million people higher than pre-COVID-19 levels.  2.2 million people have dropped out of the labor force but report they currently want a job.

Those industries hardest hit by COVID-19 are hotels (-31%), arts-entertainment and recreation (-28%), bars and restaurants (-17%), mining (-13%), and educational services (-10%).

Those industries least impacted by COVID-19 are finance and insurance (+0.3%), utilities (-1.4%), transportation and warehousing (-1.7%), and professional and technical services (-2.2%).

In November, employment declined in retail trade (-34,700) and government (-93,000 temporary Census workers and local schools: -65,000).

Long recovery or vaccine bounce back ahead?  While the latest wave of COVID-19 cases will depress economic activity for the next two months, the increasing availability of vaccines and another COVID-19 relief bill will likely result in substantially faster growth next spring.