The December Numbers Were Awful, but the Economy Has a Clear Path to Health  <font color="#6f6f6f">The New York Times</font>


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The December Numbers Were Awful, but the Economy Has a Clear Path to Health

Among the reasons for optimism: the prospect of widespread vaccination, and a Congress more open to stimulus spending.

ImageA construction site in Newark this week. Construction employment is still below its pre-pandemic levels, but the sector added 51,000 jobs in December.
Credit…Bryan Anselm for The New York Times

It seemed appropriate that the jobs numbers for the final months of 2020 would be as nasty as the year as a whole was.

It is fair to say that the loss of 140,000 jobs in December indicates a backsliding of the economic recovery that took place in the summer and fall. Other numbers in Friday’s report confirm that basically gloomy picture, such as the continued depressed share of adults who are in the labor force. In the debate over which letter of the alphabet best describes the pattern of the 2020 economy, the December numbers pretty much rule out “V.”

But. But.

The details of this report, combined with everything else swirling around in economic policy and the financial markets, make for a more optimistic case. There is an opportunity for 2021 to be the year of a remarkable bounce-back, thanks to monetary and fiscal stimulus; the delayed effects of buoyant markets over the last few months; and above all the prospect of widespread coronavirus vaccination.

The December numbers point to a jobs crisis that is contained to sectors dealing with the direct effects of pandemic-related shutdowns. Unlike the data from the spring of 2020, the latest numbers are not consistent with the sort of broad-based absence of demand in the economy that caused the recovery from the last few recessions to be so long and so slow.

jobless rolls and unsure when they’ll be able to resume work.

The good news is we know how and when those jobs can come back. If enough Americans are vaccinated, they will probably feel comfortable in returning to normal patterns of leisure activity. An outright boom in those sectors is plausible later this year. Americans’ savings are through the roof, and it is easy to imagine pent-up demand for travel, concerts and the like.

The leisure and hospitality industry was hit hard in December, while other sectors made small gains Cumulative change in jobs since before the pandemic, by industry By Ella Koeze·Seasonally adjusted·Source: Bureau of Labor Statistics Other sectors less directly affected by public health concerns — industries that were at recessionary levels just a few months ago — kept improving. They are not necessarily back to pre-pandemic levels, but on track to get there before much longer.

Construction employment, for example, is still 3 percent below its pre-pandemic levels, but the sector added 51,000 jobs in December. At that pace, it will be back to full health in the spring. The story is similar for manufacturing jobs, still down 4 percent from February but having added 38,000 positions in December.

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