Joe Biden, the new American president, will take the reins of a country whose economy is in full decline. In December 2020, for the first time since April, the balance of job creation and destruction was negative, according to data released Friday, January 8, by the US Bureau of Labor Statistics. A total of 140,000 jobs were destroyed, in the low range of what economists expected. The unemployment rate is nonetheless stable at 6.7%.
This decline is the logical consequence of the resumption of the Covid-19 pandemic and the more or less harsh re-containments imposed across the United States at the end of the year. In December 2020, 498,000 jobs were lost in the leisure, catering and hospitality sector. Restaurants and bars are particularly affected, followed by casinos and betting shops.
“These figures provide the clearest indication that the current wave of Covid-19 has ended the recovery of the US economy, says Pablo Shah, an economist at the Center for Economics and Business Research. While the Covid-19 death toll is now well above its April 2020 peak, the job market will continue to suffer for the weeks and months to come. “ The United States currently records around 2,800 deaths per day from the pandemic, up from 2,200 in April.
Colossal reconstruction work
Across the United States, containment measures have gradually tightened. In New York, bars and restaurants have been closed since mid-December 2020, except for take-out. In California, with the exception of four counties, residents are ordered to stay in their homes, and schools are closed. In Washington DC, the situation has been similar since December 23.
Unlike Europe, which has chosen the partial unemployment model to limit redundancies, the United States preferred to offer more generous compensation than usual to the unemployed. This approach caused an explosion in the unemployment rate between February and April 2020, which fell from 3.5% to 14.8%, followed by a strong return of hiring as soon as sanitary conditions allowed it. The unemployment rate was halved, dropping below 7% in October. December marks the end of this improvement.
The work of economic reconstruction promises to be colossal. In 2020 as a whole, 9.8 million people lost their jobs. A little more than half went unemployed, the other left the workforce, losing hope of finding a job quickly. Now, over 19 million Americans are on unemployment benefit.
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