Winter Labor Market is Getting Colder

NEW YORK, Jan. 14, 2021 /PRNewswire/ -- Layoffs in the US labor market are rapidly trending upwards as the virus continues to spread. Initial unemployment claims rose by 181,000 to 965,000 in the week ended January 9th. In November, the average weekly number of claims was 740,000. Layoff rates from the Job Openings and Labor Turnover survey are also trending upwards, mostly due to restaurant layoffs. Layoff rates in the Accommodation and food services industries rose from 1.1 percent in October to 3.4 percent in November. And December's jobs report showed a decline for the first time since April.

The jump in initial unemployment claims in early January suggests that layoffs and job losses probably increased further as well, especially in restaurants. Restrictions on indoor dining combined with colder temperatures preventing outdoor dining, will continue to hurt restaurant jobs for the rest of the winter.

But while the outlook for the winter is bleak, the US labor market should get much stronger in the second half of 2021, mostly due to the impact of the vaccination campaign. By the summer, the United States could reach herd immunity, preceded by very low rates of new infections in the spring. In the United States, 3.5 to 5 million new jobs should be created by the first quarter of 2022, with the unemployment rate dipping below five percent.

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SOURCE The Conference Board