The already sputtering economic rebound went into reverse last month as employers laid off workers amid rising coronavirus cases and delayed government aid.
U.S. employers cut 140,000 jobs in December, the Labor Department said Friday. It was the first net decline in payrolls since last spring’s mass layoffs and followed five straight months in which hiring had slowed.
The report was a grim capstone to a year in which the economy lost more than nine million jobs, the worst on a percentage basis since World War II. It also means that President Trump will be the first chief executive since Herbert Hoover to leave office with a net loss of jobs, with a four-year decline of about three million.
The unemployment rate was unchanged at 6.7 percent, down sharply from its high of nearly 15 percent in April but still close to double the 3.5 percent rate in the same month a year earlier.
December’s losses were heavily concentrated in the leisure and hospitality sector, which shed nearly half a million jobs as the resurgent pandemic led governors to shutter restaurants and families to cancel trips home for the holidays. Many forecasters expect those losses to continue into the new year.
“It’s a really vivid demonstration that the labor market can’t bounce back in any sustainable form until the pandemic is under control,” said Nick Bunker, head of North American research for the career site Indeed.
At an event in Wilmington, Del., on Friday, President-elect Joseph R. Biden Jr. said the report underscored the need for more federal help for households and businesses, including another round of direct payments to most Americans.
“With the pandemic raging, people are losing work and losing hope,” he said. “The bottom line is the jobs report shows we need to provide more immediate relief for working families and businesses now.”
At the same time, economists said the concentrated nature of the December job losses suggested that the damage from the latest wave of coronavirus cases had not spread to the rest of the economy. That may allow for a faster rebound as vaccinations become more widespread.
Most forecasters expect the economy to remain weak and perhaps shed more jobs in early 2021. But they are becoming increasingly optimistic about the rest of the year. The $900 billion relief package passed by Congress last month should provide an economic boost, and further federal aid could be more likely after Democrats won control of the Senate in this week’s elections in Georgia. And as coronavirus vaccines become widely available, it should allow the return of activity that has been suppressed by the pandemic.
“There are a lot of rich people who’ve saved a lot of money and really want to spend it,” said Tara Sinclair, an economist at George Washington University. “Is that going to be enough to make up for all the business that has been lost? No,…