U.S. bars and restaurants got crushed again in December after the biggest coronavirus surge yet across the country.
Eating and drinking establishments lost 372,000 jobs last month, marking the first decline since April when they laid off a whopping 5.4 million people.
A record increase in coronavirus cases spurred more states such as California and New York to limit restaurant hours of operation, restrict the number of customers or even bar indoor dining altogether.
Diners also shied away for fear of catching the virus, especially as colder weather made sitting outdoors less appealing.
Aneta Markowska, chief economist at Jefferies LLC, said most of the restaurant layoffs likely occurred in California after a broad lockdown kicked in after Thanksgiving.
She pointed out that restaurant reservations sank to 5% of precrisis levels last month from 45%, costing the state as many as 700,000 jobs.
The latest round of layoffs in the dining industry was entirely responsible for a 140,000 decline in overall U.S. employment in the December. It’s also the first time the economy has lost jobs in eight months.
Restaurants and other businesses in the broader category of leisure and hospitality — such as hotels, theaters, casinos and theme parks — have suffered the most during the pandemic.
The restaurant industry, for example, is one of the largest employers in the country and had 12.3 million workers before the coronavirus began in March. That doesn’t even include several million food-service workers at hotels, hospitals and the like.
So far bars and restaurants have only recovered 3.6 million, or 60%, of the 6.01 million jobs the industry lost early in the pandemic.
Put another way, employment is still 20% below precrisis levels.
Even as the pandemic fades, the industry is likely to struggle. Thousands of bars and restaurants have already failed or closed for good — and it’s far from clear how many customers will return right away.
The National Restaurant Association estimated last month that some 110,000 eateries are either “closed permanently or long-term.” Most have been well-established, with an average age of 16 years.