WASHINGTON (AP) – U.S. employers created a modest 199,000 jobs last month as the unemployment rate fell sharply, at a time when businesses struggled to fill jobs, with many Americans reluctant to return to the work market.
The Labor Department said on Friday that the country’s unemployment rate fell to 3.9% from 4.2% in November.
Omicron has sickened millions of Americans, forced airlines to cancel thousands of flights, cut traffic, restaurants and bars, and shut down some major school systems, potentially forcing some parents to stay. at home with their children and prevent them from working.
Yet the job market could be healthier than the modest hiring gain announced by the government on Friday. The aftermath of the pandemic has made government employment numbers more volatile, with a month’s data often followed by a very different trend a month or two later.
The economy has also shown resilience in the face of soaring inflation, the prospect of higher lending rates, and the spread of the omicron variant. Most companies report continued demand from their customers despite chronic supply shortages.
Consumer spending and business purchases of machinery and equipment have likely propelled the economy to a robust annual growth rate of around 7% in the last three months of 2021. American confidence in the economy economy edged up in December, according to the Conference Board, suggesting spending likely remained healthy through the end of the year.
Even with the modest gain in December, 2021 was one of the best years for American workers in decades, although it followed 2020, the worst year in the labor market since the record started in 1939 as a result of the pandemic recession. Companies posted a record number of open jobs last year and offered significantly higher wages to try to find and keep workers. Americans have responded by resigning en masse, mainly for better wages from other employers.
THIS IS A CURRENT UPDATE. AP’s previous story follows below.
Inflation is skyrocketing and new omicron infections are on the rise, but U.S. employers are believed to have continued to hire in December thanks to strong consumer spending.
One of the reasons for optimism about the jobs data the government will release on Friday morning is that it likely hasn’t been affected much by the omicron wave. Hiring figures will reflect the state of the labor market for the first half of December, before omicron virus cases peak.
Economists estimated that employers created 400,000 jobs last month, according to a survey by data provider FactSet. This would represent an increase from 210,000 in November. The unemployment rate is expected to drop from 4.2% to 4.1%, a relatively healthy level.
Many employers must fill positions as they continue to benefit from constant demand from customers despite chronic supply shortages. In fact, Friday’s jobs report will conclude one of the best years for American workers in decades, although it followed 2020 – the worst year in the labor market since the record began in 1939, a consequence of the pandemic recession.
Companies posted a record number of open positions last year and offered significantly higher wages to try to find and keep workers. Americans have responded by quitting en masse, mainly for better pay from other employers.
In total, the number of jobs increased by more than 4% from 2021 to November, the largest gain since 1978, after a 6.2% drop in jobs in 2020. However, the loss of jobs due to the pandemic was so large that even now the economy remains nearly 4 million jobs below pre-pandemic levels.
Economists have warned that job growth could slow in January and possibly February due to the surge in new omicron infections, which have forced millions of newly infected workers to stay home and go. in quarantine, disrupting employers ranging from ski resorts to airlines to hospitals.
Alaska Airlines said it was cutting 10% of its flights in January due to an “unprecedented” number of employees falling ill. But because omicron is less virulent than previous variants of COVID-19 and few states or localities have decided to limit business operations, economists say they believe its economic impact will be short-lived.
“At the end of the day, omicron’s move is likely to be small and relatively brief,” said Jim O’Sullivan, economist at TD Securities.
Yet Andrew Hunter, an economist at Capital Economics, a forecasting firm, calculates that up to 5 million people – about 2% of the U.S. workforce – could be stuck in their homes with COVID over the next week. about. Workers without sick leave who miss a paycheck are classified by the government as unemployed. Such a trend could significantly reduce job gains in the January jobs report, which will be released next month.
Omicron will also likely weigh on restaurant and bar jobs. The number of Americans ready to eat at restaurants began to decline in late December, according to the reservation site OpenTable. Restaurant traffic was near pre-pandemic levels for much of November, but had fallen nearly 25% below those levels as of December 30, based on a weekly average of data. from OpenTable.
Other measures of the economy mainly reflected a resilient economy. A survey of purchasing managers in the manufacturing sector found that factory output grew at a healthy pace in December, albeit slower than in previous months. Hiring has also accelerated. Auto dealers report that demand for new cars is still strong, with sales being held back by semiconductor chip shortages that have hampered auto production.
Last month, Americans’ confidence in the economy actually rose slightly, according to the Conference Board, suggesting spending likely remained healthy until the end of the year. Thanks to strong consumer spending and increased purchases of machinery and equipment by businesses, the economy is estimated to have grown at an annual rate of up to 7% in the last three months of 2021.
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