Daily Management Review

Employment in USA slumps to 57%


In the USA, new restrictions due to the pandemic led to the first drop in new jobs since April 2020: in December the figure fell by 140,000 (analysts had forecast an increase of 70,000).

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Growth in new jobs slowed to 336,000 in November from 638,000 in October. The decline is associated with a fall in employment in entertainment and hospitality, where the number of jobs declined by 498 thousand, in the public sector - by 45 thousand, in education and health - by 31 thousand. 

By contrast, employment in other sectors continued to grow, including 38,000 jobs in industry, 120,000 in retail and 161,000 in business services.

Since the beginning of the pandemic, the number of jobs in the US has decreased by 9.8 million (at its peak it was 22.4 million). Only 57% of the US working age population are now employed. 

This is less than it was in the 2008-2009 crisis and is comparable to the level of the 1970s, when employment among women was much lower than it is today, ING Bank says. Its experts do not expect the restrictions to be lifted for at least several more months, despite the start of vaccination. This circumstance will have a negative impact on consumption and will hamper economic growth in the first quarter.

Capital Economics expects that although the slump in the service sector may continue in January, with employment growth in other sectors and the start of the new fiscal package, GDP will show a positive trend in the first quarter of 2021.

source: capitaleconomics.com