08 January 2021

Shutdown-Imposed Job Losses Cancel Out Good Gains Elsewhere in December

By Michael J. Bazdarich, PhD

Private-sector employment declined by -93,000 in December, as job losses at sectors hit by newly re-imposed Covid-related shutdowns more than offset sizable gains elsewhere. The December job loss was itself offset by a +121,000 upward revision to the private-sector job count for November.

With the latest surge in Covid cases, shutdowns were reimposed on restaurants in much of the country. As a result, restaurant jobs declined by -372,000 in December. In addition, jobs declined by -103,000 at similarly affected theaters and recreation venues, and by -24,000 at lodging facilities.

Exhibit 1: Private-Sector Job Growth: Shutdown Sectors vs Others
Explore Private-Sector Job Growth: Shutdown Sectors vs Others.
Source: Bureau of Labor Statistics. 31 Dec 20. Select the image to expand the view.

In contrast, retailing added +121,000 jobs, construction +51,000 jobs, manufacturing +38,000 jobs, and health care +39,000 jobs. These sectors, obviously, were mostly unaffected by renewed shutdown orders.

Our take has been that while job growth—and economic growth in general—had been slowing in recent months from the spectacular pace of the summer, that was only to be expected as activity levels returned to nearly normal. This theme was largely repeated in December in those sectors not impeded by renewed shutdowns.

The manufacturing and construction gains continued the pace of steady recovery there. Similarly, while health care facilities had been shut down in March and April, they were generally not subject to the more recent strictures, and nice job gains there continued in December, along with a +33,000 revision to November job counts.

Retailing had been a disappointment last month, with retailing jobs declining -45,000 in November, and “control” retail sales then down -1.0%. This month’s data were more upbeat for retailing, with that sector gaining +121,000 jobs (+0.8%) and the November decline revised to -21,000. Perhaps the Christmas rush got started later in 2020 than was previously the case, which then got seasonally adjusted into a November decline. In any case, the strong December job gains in retailing (AFTER seasonal adjustment) augur for better December retail sales growth than some analysts have been projecting.

One can still debate whether the deep recession of spring 2020 was largely imposed by government shutdowns or was reflective of pandemic fears that would have restrained the economy even if it were left open. However, the December declines—and the lingering underutilization in various sectors—seem to reflect the “hand” of government-imposed shutdowns. That is, recovery continues in those areas where government is allowing it to, and in areas such as construction and manufacturing, activity has fully recovered—and then some—from the declines seen in March and April.

It may indeed be the case that renewed forcible shutdowns of restaurants and other facilities are necessary to prevent an even worse Covid spread than we have seen. However, the December job losses, where they have occurred, clearly indicate the magnitude of the economic costs offsetting the putative benefits of the shutdowns.

© Western Asset Management Company Ltd 2021. 当資料の著作権は、ウエスタン・アセット・マネジメント株式会社およびその関連会社(以下「ウエスタン・アセット」という)に帰属するものであり、ウエスタン・アセットの顧客、その投資コンサルタント及びその他の当社が意図した受取人のみを対象として作成されたものです。第三者への提供はお断りいたします。当資料の内容は、秘密情報及び専有情報としてお取り扱い下さい。無断で当資料のコピーを作成することや転載することを禁じます。
ウエスタン・アセット・マネジメント・カンパニーDTVM(Distribuidora de Títulos e Valores Mobiliários)リミターダ(ブラジル、サンパウロ拠点)はブラジル証券取引委員会(CVM)とブラジル中央銀行(Bacen)により認可され、また規制を受けます。ウエスタン・アセット・マネジメント・カンパニー・ピーティーワイ・リミテッド (ABN 41 117 767 923) (オーストラリア、メルボルン拠点)はオーストラリアの金融サービスライセンス303160を保有しています。ウエスタン・アセット・マネジメント・カンパニー・ピーティーイー・リミテッド(シンガポール拠点)は、キャピタル・マーケット・サービス(CMS)ライセンス (Co. Reg. No. 200007692R) を保有し、シンガポール通貨監督庁に監督されています。ウエスタン・アセット・マネジメント株式会社(日本拠点)は金融商品取引業者として登録され、日本の金融庁の規制を受けます。ウエスタン・アセット・マネジメント・カンパニー・リミテッド(英国、ロンドン拠点)は英金融行動監視機構(FCA)により認可され(FRN145930)、また規制を受けます。当資料は英国においては、FCAに定義された「プロフェッショナルな顧客」のみを対象とした宣伝目的に使用されるものです。また、許可を得ている特定の欧州経済領域(EEA)加盟国への配信を目的とする場合もあります。最新の承認済みEEA加盟国のリストについては、ウエスタン・アセット(電話:+44 (0)20 7422 30000)までお問い合わせください。
業務の種類: 金融商品取引業者(投資運用業、投資助言・代理業、第二種金融商品取引業)
登録番号: 関東財務局長(金商)第427号
加入協会: 一般社団法人日本投資顧問業協会(会員番号 011-01319)