January breaks healthcare's eight-month employment recovery streak

January was a dismal month for healthcare employment, breaking with what had been eight months of gradual recovery since the worst of the pandemic.

The healthcare industry lost an estimated 30,000 jobs in January, preliminary data released Friday by the U.S. Bureau of Labor Statistics show. It's the first decline since healthcare employment went over a cliff in April 2020 during COVID-19's initial wave. Healthcare lost 9% of its jobs that month, but the industry had been very slowly recovering ever since.

January's loss is a noteworthy swing from a relatively strong December, in which the industry added 44,300 jobs. Almost 16 million Americans worked in healthcare last month, down 0.2% from December 2020.

Across all industries, total nonfarm employment was mostly unchanged last month, growing by just 49,000 jobs, the BLS said. Still, the unemployment rate fell by 0.4 percentage points to 6.3%.

Hospital hiring contracted to the tune of 2,100 jobs in January. That's following a December that saw 35,600 new hospital hires—better than the sector had done in months.

Ambulatory healthcare—typically healthcare's largest employment sector—added an estimated 3,500 jobs in January, which is down significantly from the 23,000 new hires the sector made in December. Within that, physicians' offices added 3,400 jobs, down from 4,700 in December. Dentists' offices made 2,800 new hires in January, while offices of other healthcare practitioners added 5,900 new jobs.

Employment shrunk in a few areas of the ambulatory sector in January. Home health—which had been faring well in recent months—shed an estimated 13,100 jobs in January. That's after adding 200 jobs in December. Outpatient-care centers lost 2,900 jobs in January.

As has been the case throughout the pandemic, nursing and residential care facilities fared the worst, shedding a grand total of 31,000 jobs. Within that, nursing homes led the losses, dropping 19,400 jobs in January. That's after shedding another 5,400 jobs in December. Nursing homes continue to need workers to handle the challenges of COVID-19, but low wages, limited benefits and tough working conditions—not to mention the threat of catching the coronavirus—make the jobs hard to fill.

Community care facilities for the elderly lost 6,700 jobs in January, on top of 5,800 lost in December. Residential mental health facilities lost 3,000 jobs in January.