The latest coronavirus wave slammed the U.S. economy in December, wiping out 140,000 jobs, raising pressure to accelerate vaccinations and blowing the door open for President-elect Joe Biden and a narrowly Democratic Congress to push for even more stimulus spending within weeks.
The December employment report, the last to be released during President Donald Trump's administration, leaves the nation around 11 million short of the level of jobs from before Covid-19 crushed the economy and wiped out around 23 million jobs. Trump's record will now include a largely recovered stock market but an enormous net loss of jobs.
Most of the losses in December, nearly 500,000, came in the leisure and hospitality industries as fresh lockdowns and lower travel led to widespread layoffs. The expiration of some of the first big stimulus package, passed back in March, also left consumers with less money to spend, hitting demand in the economy.
The weak December figure left the jobless rate at 6.7 percent, suggests the distribution and adoption of coronavirus vaccines must increase rapidly in order to avoid much worse damage and allow for potential recovery in the spring and summer.
And it will give Biden and the Democrats wider leeway to force through trillions of dollars more in stimulus spending - by whatever legislative means available - including significant help for state and local governments. It also means the Democrats will likely be able to approve enough direct cash to reach the "$2,000 check" level they've long supported, when including the $600 checks approved by Congress and signed by Trump last month.
"The economy went into reverse in December and we are still 11.5 million jobs short of where we were, and the biggest problem was the virus and the expiration of stimulus," said Harvard professor Jason Furman, who served as chair of the Council of Economic Advisers under President Barack Obama. "Much more action is needed to control the virus and support the economy. And I think that will be enough to generate large improvements over the course of 2021."