Healthcare lost jobs in December amid lackluster economy-wide gains

Healthcare employment contracted slightly in December, continuing its choppy recovery from historic job losses early in the COVID-19 pandemic.

The healthcare industry shed an estimated 3,100 jobs in the final month of 2021, with losses in nursing homes once again pulling down strong gains in the outpatient sector. This time, hospitals added to the losses, per a jobs report the U.S. Bureau of Labor Statistics released Friday. The numbers are preliminary estimates the agency revises once it receives more data.

The overall economy added 199,000 jobs last month—far fewer than economists had projected—and the unemployment rate declined from 4.2% in November to 3.9% in December.

The healthcare industry is taking much longer to recover its jobs than other sectors because nursing homes are struggling to hire and retain workers after being devastated by the coronavirus and hospitals continue to be overwhelmed with COVID-19 patients, driving up their staffing costs and crowding out their capacity to treat other conditions.

Healthcare added 63,300 jobs between December 2020 and December 2021, a 0.4% increase. That's compared to a 2.1% increase the year before the pandemic. The sector added 334,900 jobs between December 2018 and December 2019.Nursing homes had 5,200 fewer jobs in December and community care facilities for the elderly shed 2,200 jobs last month. Within healthcare, nursing homes have had the toughest time regaining jobs during the pandemic, with employment contracting month after month even as other sectors recover.

The hospital sector's employment recovery has been perhaps the most turbulent within healthcare. Hospitals lost another estimated 5,100 jobs in December after a small gain the prior month, which the U.S. Bureau of Labor Statistics revised up after initially projecting hospitals had lost jobs in November.

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Meanwhile, the ambulatory sector employment continues to gain at a much steadier pace, adding an estimated 8,100 jobs in December, down slightly from November's increase. Within that, physicians' offices saw the biggest rise, adding an estimated 4,000 jobs. Dentists, outpatient care centers and diagnostic laboratories saw barely noticeable upticks.

Total employment has increased by 18.8 million since April 2020 but is down by 3.6 million, or 2.3%, from its pre-pandemic level in February 2020, U.S. Bureau of Labor Statistics data show.

Leisure and hospitality posted the biggest increases in December, adding an estimated 53,000 jobs, although employment in that industry is still down 7.2% from February 2020. Professional and business services also posted a noteworthy rise of 43,000 jobs, although employment in that sector is still slightly below its February 2020 level.