December is following a bad November for the labor market. According to this morning’s employment data from the BLS, employment dropped by 140,000 in December. The biggest hit was in Accommodation & Food Services – down by almost 400,000. The second largest drop was in Arts, Entertainment & Recreation where employment decline by 102,600. Both of these industries are directly hit by the pandemic. The bright spots were increases of 191,000 in Trade, Transportation & Utilities and 157,200 in Professional & Business Services.
The most important part of the story, however, may be the across-the-board slowdown in hiring. While the four sectors discussed above had the biggest changes, the rest of the economy was essentially flat. Employment in some tangible-producing industries, such as Construction & Mining, Manufacturing, and Tangible business services, increased slightly; employment in others, such as Repair & Maintenance, Personal & Laundry Services, Telecommunications, and Tangible educational & health services declined. Employment in the intangible-producing sectors showed the same mixed pattern. Employment in Membership Associations, Education & Health Services, and Government declined somewhat. Employment in Information and in Financial Activities increased.
For more on the categories, see my explanation of the methodology in an earlier posting.
