U.S. job growth slowed in December
The U.S. hiring slowdown continued last month, with employers struggling to fill jobs as many workers remained on the sidelines.
Employers added 199,000 jobs in December, the Labor Department said Friday, the smallest monthly gain of the year. The deceleration began in November, when 249,000 jobs were added.
The unemployment rate fell to
3.9 percent, from 4.2 percent.
Paired with strong wage growth — average hourly earnings climbed
4.7 percent over the year, more than the 4.2 percent economists in a Bloomberg survey expected — the swift decline in the jobless rate seems to suggest a dearth of available workers may be, in part, what is holding hiring back.
“The unemployment rate is a reliable barometer, and it’s going down fast,” said Julia Coronado, founder of the research firm MacroPolicy Perspectives. “It does speak to not having enough labor supply to meet demand — not faltering demand.”
For the year, the economy added 537,000 jobs per month on average, and more than 6.4 million jobs overall.
The data released Friday was collected in mid-December, before the pandemic’s latest wave. Since then, the omicron variant has ignited a steep rise in new coronavirus cases, driving up hospitalizations, keeping people home from work and prompting fresh uncertainty among employers. Economists are bracing for the surge in cases to further disrupt job growth in January.
“I think omicron will slow hiring in January,” said Nela Richardson, chief economist at the payroll processing firm ADP, said before the report. “It might hit in early February as well.”
The seesawing employment situation underscores the economy’s continued susceptibility to the pandemic, nearly two years on. Although the labor market has brightened, some industries with face-to-face interactions, notably leisure and hospitality, remain extraordinarily vulnerable to case levels.
Restaurants, hotels and other hospitality businesses managed to hire at a steady pace in December — adding 53,000 workers — but other industries struggled to hire. The number of hospital workers dropped in December, the report showed, even as those businesses were reported to be scrambling to add nurses and doctors.
The figures may also have been affected by seasonal patterns: Jobs data is adjusted for typical monthly patterns that have been thrown out of whack by the pandemic.
The slowdown could get worse before it gets better as omicron cases surge. Many businesses have postponed return-to-office plans, some indefinitely. Restaurants and theaters have increasingly gone dark amid staff shortages and renewed fears of infection. Some schools have returned to remote learning, or are threatening to, leaving many working parents in limbo.
“We’re all sort of at the whims of these variants and surges in cases, and it’s hard to know when they might strike,” said Nick Bunker, director of economic research at the Indeed Hiring Lab. “Any sort of projections or outlook on the pace of gains over the next year or so is still dependent on the virus.”
Employment levels remain depressed compared with the period before the pandemic, even as job openings remain remarkably high by historical standards. The economy has added 18.8 million jobs since April 2020 — when pandemic-related lockdowns were at their worst — but is still down 3.6 million positions compared with February 2020.