Metro Cleveland Economy- Dec 2020

Weak Labor Force & Employment Estimates Are Possible Danger Signs for Metro Cleveland's Pandemic Recovery

The pandemic had a severe impact on employment in Metro Cleveland: employment in Dec. 2020 was 911,000, about 79,000 (-8%) lower than Dec. 2019.

Metro Cleveland lost over 70,000 workers in the 2008-2010 recession. The recovery was slow and the economy gained back only 40,000 jobs in 9 years, ending 2019 with employment of about 990,000.

Metro Cleveland lost over 120,000 jobs in March and April due to the pandemic. It gained back about two-thirds of the jobs in subsequent months before the recovery flattened out in the fall of 2020 and employment fell sharply in Dec. 2020. At year-end, employment was still 47,000 (-8%) below Dec. 2019.

A chart of monthly employment changes shows more clearly the economy's momentum. After a period of small, fluctuating month changes in 2019, employment dropped sharply and then rebounded strongly before settling into a generally positive fall. The year-end drop wiped out fall's gains.

Unemployment and month employment changes during 2020 were generally a mirror image of employment during 2020 with the exception of Dec. 2020. While employment dropped in Dec. 2020, unemployment did not surge.

During Dec. 2020, the labor force contracted sharply. Whether the drop was simply a statistical fluke and represented a more troubling labor force contraction will be determined by data in the following months.

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