Omicron surge latest setback, but unemployment down to 3.9%
As has become the norm for monthly jobs reports lately, the number of jobs added in December in the U.S. fell well short of projections, but unemployment ticked down and wages are going up. In a low for 2021, there were 199,000 jobs added in December. That figure was less than half of what projection models predicted, a recurring theme over the last several months. Wells Fargo economist Sarah House told CNN that part of the problem is economists have not adjusted their models to account for the labor shortage the U.S. has been experiencing.
In a tight jobs market, unemployment fell to 3.9%. In November, a record 4.5 million Americans quit their jobs, many taking positions that offered better pay, benefits, and flexibility. Many others have been starting their own businesses. Despite falling short of projections, the U.S. added a record 6.4 million jobs in 2021, perhaps not surprising given how many people lost their jobs in 2020. The economy is still 3.6 million jobs short of February 2020 levels.
As the omicron variant sent a new wave of infections and concerns across the country and the world, the restaurant and hospitality industry led the December jobs gains, but at just 53,000. Many of those were replacing people who left the industry in November. It’s still down more than 1 million jobs from pre-pandemic levels. Despite the Christmas shopping season, retail showed a seasonally adjusted net loss in December.
Unsure what to make of the report, markets ended the week with small losses after gains early in the day. The Dow Jones Industrial Average finished down 5 points, the S&P 500 was down 0.4%, and the Nasdaq fell 1%.
As the omicron wave continues, the highly contagious variant has sent workers home at levels not seen since the start of the pandemic, so 2022 doesn’t figure to be off to a great start.