Ahead of Omicron Surge, Weak December Jobs Report Adds Only 199,000 New Jobs
Total nonfarm payroll employment rose by only 199,000 in December, the Bureau of Labor Statistics reported, widely missing estimates of 422,000 by over half.
The BLS also reports the employment rate fell to 3.9% as employment continued to trend up in leisure and hospitality, professional and business services, manufacturing, construction, and transportation and warehousing.
The mixed report shows positive signs for the economy but affirms the ongoing threat the pandemic poses to full liftoff. Job creation was highest in the key recovery sector leisure and hospitality, and overall private sector wages increased as well.
Murali Patnam, VP/GM of NCR Hospitality, tells GOBankingRates, “From our perspective, the staffing challenges in the restaurant industry are nationwide. Restaurants are overcoming this by focusing on retention with flexible work hours and increased wages. They are also over-hiring to compensate for attrition. A customer of ours in Denver told us they’re paying 20-25% higher for kitchen and back of the house staff. Another customer in Jacksonville, Fla. is paying 35 to 40% higher and is still struggling to attract talent.”
This could help explain why wages have slightly increased and unemployment remains near pandemic lows in tandem with disappointing new jobs reports. There simply might not be enough new willing workers to fill the gap left by those who quit fast enough to be captured in the data.
Important to note, this data was taken before the onset of the new Omicron variant began to rip through the country and start forcing closures by some of the nation’s largest retailers.
“The latest Covid surge has shown us that black swan-type scenarios have become the new norm,” Patnam adds.
The labor force participation rate did not change. More overarching measures of unemployment within the report, a measure of unemployment that includes discouraged workers and those holding part-time jobs out of need, decreased by .4%. While unemployment fell, the Black unemployment rate increased during the month, increasing to 7.1% from 6.5%.
Without capturing the full effect of the Omicron variant on the jobs market, the mixed report highlights how the recovery is still restricted to pandemic pressures.
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